The threat of scammers is very real. In February, our regulator the Financial Conduct Authority (FCA) issued a public warning to consumers highlighting that over £197m had been reported in losses due to investment scams during 2018 alone.

Fraudsters are moving away from the traditional cold call and are now contacting people through emails, professional looking websites and social media channels, such as Facebook and Instagram, where they pose as investment professionals making enticing offers for new and exciting opportunities.

Many of these scams predictably involve the more obscure and exotic-sounding investments such as Cryptocurrency, Binary Options and Foreign Exchange. However, they can also target prudent financial planning events, such as reviewing pension options or preparing for retirement – both of which are common needs and will often require the help of a legitimate professional adviser.

While the fraudster’s methods are undeniably becoming more convincing, spotting when something isn’t right can be relatively simple. There are some basic rules of thumb, as recommended by the FCA, and although legitimate businesses may contact people unexpectedly, you should always keep an eye out for any combination of these behaviours:

1. Unexpected contact – Traditionally, scammers cold call, but contact can also come from online sources such as email or social media, by post or word of mouth, or even in person at a seminar or exhibition.
2. Time pressure – They might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.
3. Social proof – They may share fake reviews and claim other clients have invested or want in on the deal.
4. Unrealistic returns – Fraudsters often promise tempting returns that sound too good to be true, such as much better investment returns than elsewhere.
5. False authority – Using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.
6. Flattery – Building a friendship with you to lull you into a false sense of security.

You should also keep an eye out for phishing/spoof emails, particularly if they ask for personal or security information such as your username, PIN, password, answers to security questions, or contain links that take you to web pages that request any of this data.

These emails can appear to come from a trusted source. However, if you take a moment to examine the email address you may find that it’s a bogus variation intended to appear authentic. For example: @mail.airbnb.work as opposed to @Airbnb.com.

The emails may also be poorly written, with poor spelling and grammar, or contain strange turns of phrase. You should never click on any email attachments until you’re sure where they come from.

Netwealth will never request your security information or ask you to carry out any form of transaction by email. For any such contact we use a secure messaging service that is only accessible via your Netwealth account.

The bottom line is: if you know what to look for and stay vigilant, your wealth should remain safe. Here are three key takeaways:

1. Reject unsolicited investment offers whether made online, on social media, over the phone or in person.
2. Check the FCA Register to see if the firm or individual you are dealing with is authorised and check the FCA Warning List of firms to avoid.
3. Seek impartial advice before investing.

Netwealth fully supports the FCA 'ScamSmart' campaign. We encourage anyone who has been a victim of a scam and wishes to report the matter – or simply wants to find out more – to visit the FCA website and take a look at the information resources available.

For a searchable, quick-reference list of firms and individuals that are not FCA authorised, and should therefore be avoided, please visit this FCA resource.

Please remember that when investing your capital is at risk.