It’s an enticing offer isn’t it… and one that’s increasingly catching people out as they get lured into investment scams…

Eric wanted to help his grandson with a house deposit. He’d been researching places to invest his money after growing frustrated with the current interest rates he was getting with his bank.

One website, which claimed to be a ‘bitcoin brokerage’ promised guaranteed returns of 10-26%. The site was well designed, and looked ‘official’. He was asked to fill in a contact form for a call back and almost immediately was in touch with an “account manager”, called Jason.

Jason was very convincing, not only about the investments he looked after, but the wider economy. He asked for a minimum investment of £5,000, which he told Eric he could withdraw any time. This was reassuring, and Eric felt that his money would be safe.

Jason jumped to help Eric set up the accounts needed, claiming the process could be difficult. Encouraging Eric to download ‘screen sharing’ software, Jason talked Eric through the entire process, helping him navigate every step of the onboarding process from setting up new bank accounts to verifying his identity and confirming his email.

As far as Eric was concerned, he now had an ‘investment account’ with a new provider, which he could send money to quickly and simply.

The investment quickly soared; Jason showed Eric some upwards graphs, and offered to send a portion of the profits back. Eric took the money, feeling reassured about his decision to work with Jason. Soon, Jason offered a better rate, for a bigger investment. Eric agreed.

Eric was now £15,000 invested, and was told he’d already earned 20% on that. He decided this would be a great time to take the full money out of the company. He’d had a good run, and wasn’t greedy….

But suddenly, it wasn’t that easy. Eric needed to pay an exit fee, which he wasn’t told about before… it was £2,000, almost all of his profits. He was annoyed, but keen to get out of the investment and get his money back in the bank. He paid £2,000, and waited for the full funds to be returned to his bank.

Eric heard nothing for 6 days.

The brokerage website had now disappeared. He couldn't contact Jason, and couldn’t access the account they’d set up together.

Eric slowly realised what had happened, he’d been scammed.

Investment scams are on the rise, and Eric’s story is just one of many that have taken place right now, in the UK and elsewhere. For these types of scams in particular, criminals look for people who might have higher levels of savings, and may not be as informed on investments like crypto and bitcoin. Crypto’s reputation for major fluctuations makes them a great front for unrealistic investment returns.

So what do you need to know if someone approaches you with an investment opportunity, or you seek one out yourself?

Things you need to know:

1. Almost no investment offers a guaranteed return.
The very act of investing is a risk. Anything that suggests a guarantee is likely to be false. In short, if it looks too good to be true, it probably is.

2. You should never download remote software onto your phone or computer to help you make a payment or create an account.
It can allow scammers to make payments on your behalf, and give them ongoing access to your financial accounts. Remote access software makes it even harder for your provider to spot scam or suspicious payments, as it appears to be coming from your device and your account. This means scammers can operate unnoticed for longer periods, meaning a higher risk of bigger losses.

3. The FCA regulates legitimate investment companies.
You should check to see if you’re dealing with an authorised investment firm here. If not, you should see whether they appear on the FCA’s warning list.

4. The FCA has this to say about bitcoin and crypto:
Cryptoassets are considered very high risk, speculative investments. If you buy these types of cryptoassets, you are unlikely to have access to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) if something goes wrong. If you invest in cryptoassets, you should be prepared to lose all your money.

You can read more about the rise in investment scams here. If you think you’ve been the victim of a scam, follow our instructions here.

If you hear of a friend or family member who has been approached for an investment that sounds like Eric’s, speak to them urgently. You could help save them from losing a lot of money.

*Eric’s story is a combination of events that have happened to real people, but in itself is fictional to help raise awareness about scams currently affecting the financial sector.