One in 10 investment opportunities offered to the over 55s are scams, according to research by consumer watchdogs in the UK.
Crooks are preying on those approaching retirement who want to win a better return from their savings.
Trapped in low interest rates, thousands of savers are looking to make more from their savings but are finding only risky unregulated investments promise the high returns they yearn.
The Financial Conduct Authority, the UK regulator of advisers and financial firms, has published a report that shows 40% have moved from cash into investments.
More than a 25% opted to put their cash into unregulated investments, while another 23% indicated they are considering doing so.
One in four investors conned
One in four investors who fell victim to fraudsters confirmed they had bought an unregulated investment from an unlicensed financial adviser.
Advisers are banned from promoting unregulated investments to the British public.
These investments come with a high risk of losing money. They are also outside of the remit of the Financial Ombudsman and are not covered by the Financial Services Compensation Scheme. If the deal turns out to be a scam, often the only recourse for compensation is through the courts.
FCA director of enforcement Mark Steward said: “It’s not only inexperienced investors who fall for scams. These crooks target sophisticated investors as well.
“The study found six out of 10 people involved in a scam did not report the matter. The problem is probably a lot greater than we realise because of this.”
Bombarded with cold calls
The FCA also revealed that more unlicensed advisers are bombarding the over 55s with telephone calls out of the blue offering dubious investments.
Close to a third had a call from a suspected scammer, while many had three or more calls from the same bogus firm.
Typical risky investments pushed by scammers include carbon credits, land in the UK or overseas, fine wine, art, hotel resorts, coloured diamonds and shares in agricultural projects.
The report is the latest move in the FCA’s ScamSmart Campaign.
Investors aged 65 or older with more than £10,000 in savings are most likely to fall victim to fraudsters, claims the FCA.
A fifth of retirees have unregulated investments and many are worthless. Some are investing every month. The average investment is £4,000.