Investment scam warning as bank says customers handed over £18m to fraudsters

People are being warned to watch out for investment scams as the end of the tax year approaches, as HSBC UK said just over £18 million was taken from its customers by fraudsters posing as legitimate providers in 2020.

A total of £18,090,154 worth of losses were reported to HSBC UK by its customers due to investment scams in 2020.

Adverts may look like genuine offerings from a bank or financial services provider, and fake cryptocurrency investment schemes are also an issue, the bank said.

Fraudsters target people by email, social media, or phone and also set up convincing web pages to trick victims into transferring money.

Sometimes they may use the name, registration number and address of an authorised firm, or even clone their website, to promote an investment opportunity.

The new tax year starts on April 6, and investors may be looking for new opportunities.

HSBC UK customers who were tricked into transferring money to investment scammers lost £19,728 on average in 2020.

The bank said it follows practice standards to prevent financial crime and where it identifies a potentially fraudulent payment or scam it takes action immediately. It publishes advice on the latest scams on its website.

James Hewitson, head of wealth management at HSBC UK, said: “We’re aware that fraudsters have used and are continuing to use the Covid-19 pandemic to take advantage of people who may be in an anxious state and facing financial difficulty.

“Customers may see an advert on the web or on social media for an investment scheme that promises low risk for high returns. The general rule is that if an offer seems too good to be true, it probably is.

“Customers can confirm a company is authorised by checking the FCA (Financial Conduct Authority) website or contacting their bank if they’re unsure about an investment.

“As a responsible provider we will never contact an individual out of the blue about a bond and we only process such investments with a personal appointment.”

Older people may be particularly vulnerable to losing high amounts to investment scams, as they can access large cash lump sums from their pension pots.

In one case dealt with by the bank, a 76-year-old HSBC customer visited a London branch to transfer money to the United States.

Through a conversation with the customer it was clear that the customer had only known the firm for a very short period of time and was uncertain about what he was investing in, HSBC said.

He had transferred £744 the week before but had now decided to send his entire savings, £70,000, to the company.

The branch manager reviewed documents the customer had provided about the investment and became even more concerned.

The police attended the branch to talk to the customer and it was confirmed that the firm had been previously flagged for fraudulent activity. The customer was advised the payment should not be made.

 – HSBC UK said warning signs of an investment scam could be:

– If a company contacts you out of the blue, either by phone call, text message, email, post or a person knocking on your door.

– They pressure you into making a quick decision, for example, by saying it is a limited-time offer.

– The contact details are only mobile phone numbers or a PO box address.

– You are being offered a high return on your investment, but are told it is low risk. If it seems too good to be true, it probably is.

– HSBC said if it is a cryptocurrency investment, make sure you understand the offer and how the investment works before handing over any money.