Brits lose more than £2.6bn to investment scams since 2020, pension body warns

Britons have lost more than £2.6bn to investment fraud since the start of 2020, according to new research, as experts warn of the rise of scams originating on social media.

Between January 2020 and December 2023, investment scammers stole an average of nearly £13m per week from 98,525 victims, according to a Freedom of Information request to the City of London Police’s National Fraud Intelligence Bureau by the Pensions Management Institute (PMI).

The average victim lost £26,773 to these scams over the four-year period, the PMI said.

In 2023, 26,740 people fell victim to investment fraud – the most victims in one year during the period. Last year saw a total of £527m lost to investment scams, worth an average of more than £1.4m per day.

Investment fraud losses spiked during the Covid-19 pandemic as people relied more on online services. The PMI said the cost to victims totalled £756m in 2021 and £855m in 2022.

Experts have warned the ongoing cost-of-living crisis is putting more people at risk of bogus ‘get-rich-quick’ schemes as millions look for a fix to their financial woes.

Meanwhile, banks and policymakers have called on Big Tech firms to take more responsibility for the increasing rate of fraud originating online.

Lloyds Bank issued an “urgent warning” to customers last November amid a surge in cryptocurrency fraud, estimating that nearly two thirds (66 per cent) of investment scams originated on social media.

The PMI highlighted boiler room fraud as one of the most common types of investment scams. In this type of scam, victims are cold-called by bogus stockbrokers and pressured into buying shares or bonds in worthless or non-existent companies.

The technique cost 20,789 victims a total of more than £553m over the four-year period, including £106m last year.

Ponzi and pyramid schemes are another common form of scam, hitting 12,323 Brits since the start of 2020 and costing £499m. Meanwhile, pension liberation scams cost victims £19m over the four-year period.

Robert Wakefield, president of the PMI, said: “Our research shows that a shocking number of people are falling victim to investment fraud. It is concerning that every year thousands of people are losing millions of pounds to financial scams in the UK. The number and sophistication of investment scams is ever-growing.

“By maintaining a healthy dose of scepticism and training yourself to spot some common red flags, you may be able to protect yourself and your loved ones from becoming victims. Increasing the amount of financial education provided in schools could also help to make people more aware of the risks of investment scams.”