Barclays urges action as investment scams rise by 29 per cent – with 6 in 10 falling victim on social media
- The volume of investment scams rose by nearly a third last year and accounted for the highest proportion of money lost to scammers by Barclays current account customers
- The average investment scam claim was over £14K, increasing to over £16K for men
- A quarter of 18-34 year olds have spotted a suspected investment scam on social media and almost a fifth have been contacted via social about a purported investment opportunity
- Barclays calls for social media platforms to act fast to improve verification of financial adverts, as part of their commitment to the Online Fraud Charter
Investment scams accounted for a third (33 per cent) of all money customers lost to scammers in 2023, up 23 per cent year-on-year, according to Barclays data1. Of all scam types, investment scams made up the greatest share of total claim values, with the volume of investment scams increasing by almost a third (29 per cent).
This spike is being fuelled by scammers taking advantage of their ability to promote unverified financial adverts on social media sites; more than 6 in 10 (61 per cent) investment scams now take place on these platforms.
Believing that they are investing in their future, investment scam victims are claiming an average of £14,313 – over five times more than the overall average scam claim. Barclays data shows millennials and men are particularly susceptible – men’s average investment scam claim increases to £16,306, while claims by young people aged 21-40 account for 48 per cent of all investment scams.
Whilst scammers target potential victims in a number of ways, adverts purporting to offer high-return investment opportunities are a common tactic – with a quarter (23 per cent) of young people saying that they’ve spotted what they believe to be an investment scam advertised on social media2. Almost one in five young people (17 per cent) have been contacted on social media by an individual offering an investment opportunity and one in every 10 people in the UK (11 per cent) know someone who has fallen victim to an investment scam.
A common trick that scammers will play is to get their victims to invest a small amount at the start – this then seemingly returns high rewards, which the scammers pay out from other victims’ money. This often convinces the victim that the investment is legitimate and in-turn leads to larger amounts being lost to the scammers, often over a long period of time.
As testament to the importance of due diligence, analysis of data from the FCA’s consumer helpline3 shows that there has been a sharp spike in investment scam-related calls, up 193 per cent in the last five years. The data also reveals investors have saved £2 million by identifying when purported investment opportunities were too good to be true – either by spotting spelling, grammatical or formatting mistakes, or by realising that requests for personal information were suspicious.
Stephanie Mac Sweeney, Head of Fraud Strategy at Barclays said: “It’s worrying to see such a rise in investment scams – with victims often heartlessly scammed out of large sums of money that they have been saving for their future. The banking industry works hard to educate, identify and intercept scams, but the only way to drive real change is to target these scams at their source. With the majority of investment scams now taking place on their platforms, social media firms must take responsibility, act on their promises and deliver a robust verification system to protect innocent people from falling prey to fraudulent investment adverts.”
Stephanie Mac Sweeney offers her top tips to help identify an investment scam:
1. Stop: Social media thrives on human impulse and scammers often create a false sense of urgency. It’s important to pause and reflect before committing to any investments.
2. Think: If an offer seems too good to be true, it probably is – particularly in the case of investments advertised on social media. Speak to a qualified financial advisor or family member to get a second opinion. Be wary of taking investment recommendations from a friend without doing your own research – whilst they may mean well, it’s important to make sure both you and your friend aren’t at risk of falling victim to a scam.
3. Investigate: To test if an investment opportunity is genuine, check to see if the person or organisation contacting you is FCA authorised via the Financial Services Register or the FCA’s ScamSmart Investment Checker. Do your own research and look for unbiased reviews of the potential opportunity you’re considering.
More information on how to spot an investment scam and tips on how to protect yourself can be found on the Barclays website.
ENDS
Notes to editors
1. Barclays business and personal current account customer scam data for January – December 2023.
2. Consumer research conducted by an Opinium study of 2,000 participants, February 2024. Unless stated, all data cited is for young people, aged 18-34 years.
3. FCA ScamSmart research and data: Armchair detective investors take inspiration from Sherlock Holmes to foil investment scams
For more information, please contact please contact Dee Fallon at deirdre.fallon@barclays.com or India McMillan at india.smyth@barclays.com
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