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Wine. diamonds, land. might mean scam

Press AssociationPress Association 30/05/2016 Vicky Shaw

People aged over 55 are at a growing risk from investment scams involving products such as fine wines, diamonds and land, research shows.

Low interest rates, which have hammered savers' returns in recent years, are driving the over-55s to consider investing in a wider range of products than they may be unfamiliar with, according to research for Britain's Financial Conduct Authority (FCA).

As part of the FCA's ScamSmart campaign, to help protect investors from investment fraud, the study found that 41 per cent of over-55s have moved money out of savings into investments as the sustained period of low interest rates prompts riskier investment behaviour in a hunt for a better rate of return.

Of those questioned, 26 per cent chose to invest in unregulated investment products and 23 per cent are considering investing in unfamiliar types of investments.

People aged 55, now have greater choice over how they use their pension pot savings. However, some fear this could make them more of a target for fraudsters.

There are concerns that people are being plagued by cold calls with offers of investment schemes. Nearly a third (32 per cent) of over-55s reported being contacted by a firm offering investments in the past 12 months.

Of those, 40 per cent have seen an increase in the number of calls and 37 per cent had been contacted as many as three times.

The FCA said 27 per cent of those who have fallen victim to investment fraud are scammed via an unauthorised firm selling unregulated products such as wine, diamonds and land.

Some 13 per cent of those questioned were unaware that unregulated products bought through an unauthorised firm offered no protection from the Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS), if something goes wrong.

Despite the risks, 48 per cent of those investing in unregulated products through unauthorised firms did so without getting professional advice or checking publicly available investor information, such as a warning list kept by the FCA. The list details firms and individuals the FCA knows are operating without its authorisation.

The regulator's campaign is backed by former star of The Apprentice turned Countdown host Nick Hewer, who said he'd been targeted by cold call scams.

"Scammers are embedding themselves into people's lives and pretending to be close friends of their targets, frequently the elderly and those living alone, before draining their life savings on a false promise of great returns through bogus investments," Hewer said.

"The tactics that these criminals use are very, very sophisticated - they could suck-in even the savviest of investors - something that everyone should be aware of.

"I, too, have been targeted by unsolicited calls from scammers and would advise that if you ever receive a call offering you the investment of a lifetime, just put the phone down, as I did.

"Go by the rule that if it sounds too good to be true, then it probably is. If the investment was that good, everyone would be investing.

"If you are still in two minds, go to the FCA website and check the warning list.

"My best advice: when you receive a cold call - just put the phone down."

Previous FCA research found that those aged over 65 with savings of more than STG10,000 pounds ($A20,372) were three-and-a-half times more likely to fall victim to investment fraud, compared with the wider population. Those living in London, the Home Counties and the South East were particularly at risk.

Mark Steward, director of enforcement at the FCA ureged people to be sceptical.

"Be suspicious. Ask questions. Do your own checks before investing. Check the FCA ScamSmart website, the FCA warning list and the FCA register to see if those that are asking for your money are the real deal," he said.

"If you do experience investment fraud or suspect it, report it.

"Our research found that 60 per cent of those that have experienced investment fraud have not reported it, so the problem could be greater than we know and by reporting it you are helping us to protect others."

More than 2,300 people aged over 55 from across the UK took part in the research.

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