Over 55s at heightened risk of fraud, says U.K. regulator

Retirees report a sharp rise in the volume of unsolicited investment calls

By: James Langton
May 25, 2016 December 19, 2017
09:30

The U.K. Financial Conduct Authority (FCA) is warning retirees to take the necessary precautions before making investments, in a bid to help combat widespread investment fraud.

A study, published Wednesday by the U.K. regulators, reveals that the current low interest rate environment is one of the key reasons over 55s are considering investing in a wider range of unfamiliar types of investment products.

Among those contacted by a firm they hadn’t heard of in the last 12 months, four in 10 (40 per cent) reported a sharp rise in the volume of unsolicited investment calls, which according to the FCA is the most common tactic used by investment fraudsters.

Of those questioned, over a quarter (26 per cent) chose to invest in unregulated investment products and 23 per cent say they are considering investing in unfamiliar types of investments in the future. Over a quarter (27 per cent) of those who have fallen victim to investment fraud did so having bought an unregulated product through an unauthorised firm, according to the FCA study.

When survey, 22 per cent of retirees holding unregulated products revealed they have invested more money into unregulated products over the last year than ever before, the FCA study says, with three per cent investing as often as once a month. Those considering investing in unregulated products in the next 12 months indicated that they would invest an average of over £4,000, with land, wine and art as popular investment choices, the study adds.

Additionally, older investors reported seeing a sharp rise in unsolicited investment call, the FCA study reveals, with three in 10 (32 per cent) retirees reported being contacted by a firm offering investments in the last 12 months with nearly four in 10 (37 per cent) being contacted as many as three times.

“You don’t need to be gullible to lose money to a scam or fraud. Fraudsters target financially sophisticated people too, who often don’t like to ask what might sound like silly or basic questions,” says Mark Steward, director of enforcement at the FCA, in a statement.