Investment fraud reports jump 74 per cent in a year

By Daniela Esnerova

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May 02, 2019

Reports of investment fraud jumped by 74 per last year, according to data from Office for National Statistics.

The number of investment-related fraud cases recorded by Action Fraud or referred to the National Fraud Intelligence Bureau rose to 6,890 in the 12 months to December last year, up from 3,950 in for the year to December 2017.

The most commonly reported investment-related crime had to do with selling shares and bonds. Action Fraud registered 860 such cases last year, up from 200 in 2017.

Another 380 reported cases last year fell under the ‘pyramid or Ponzi schemes’ category – which rose more than sevenfold compared to 2017.

According to partner at the international law firm Pinsent Masons Alan Sheeley, the search for higher yield leaves retail investors exposed to fraudsters.

Sheeley says: “Fraudsters are taking advantage of investors’ need for income. Suppressed interest rates on mainstream savings products have driven retail investors towards higher yielding, more lightly regulated investments.

“Combined with the ease for companies of reaching the mass market through online advertising, this has added a new layer of risk for retail investors.

“The UK benefits from an open investment market but high incidences of reported fraud shows there are cracks in the structure.”

Pinsent Masons says one option available to victims of fraud is to pursue losses through civil courts. The advantage of doing this is that in civil cases, individuals can ensure the primary focus of the investigation is on recovering any funds lost.

Sheeley adds that victims of frauds can look to recover lost funds in civil cases: “In civil fraud cases, courts have the power to issue freezing, search and seizure orders quickly, which can be vital in stopping fraudsters getting away with the proceeds of crime.”

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