Cold call investment scam: how it works and how to stay safe

Financial watchdog reveals how cold call investment scammers will try and con you out of your life savings.

Investment scammers will use any tactic to steal your hard-earned money.

In order to help you stay safe, the Financial Conduct Authority (FCA) has released a new video illustrating how scammers will try and trick you over the phone.

Typically, the cold caller will claim to offer “low risk, high reward” investment opportunities that will ensure your money is working hard for you.

They will likely also claim they to charge very low fees, and that they’ve helped many thousands of people just like you.

Have a watch of the FCA video below to see how scammers operate, then read on to find out how to stay safe.

3 steps to beating cold call investment scammers

It sounds obvious, but the best way to beat cold call scammers is to simply hang up on them.

“If you've been cold called out of the blue about an investment opportunity, chances are it's very risky or a scam,” the FCA sys. “The safest thing to do is hang up.”

But it’s not always that straightforward. Scammers will often come up with ways to make it seem like they’ve not cold called you.

For example, they’ll mention a brochure or email that they have sent you.

Your next port of call should be the FCA Warning List.

This allows you to check whether the investment you’ve been offered or company you’ve been contacted by is on the scam list.

Finally, you should consider impartial advice from a financial adviser before you make an investment.

“If you have been unexpectedly approached about an investment opportunity that you are interested in pursuing, you should first seek impartial advice from a financial adviser unconnected to the firm that has contacted you,” the FCA says.

Although this isn’t free, financial advisers will let you know if they have concerns that the investment is riskier than you were told, or simply unlikely to work out as promised.

The FCA recommend finding your own adviser by using services such as Unbiased, Find An Adviser and VouchedFor.

“We recommend you do not speak to an adviser indicated or referred by the firm you’re thinking of investing with – they are unlikely to give you impartial or truly independent advice,” the regulator warns.

“This should help protect you from losing your money in a scam or risky scheme that is not right for you.”

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