More than 8,000 investment fraud reports have been made so far this year, more than double the amount in the same period last year, a Freedom of Information request has revealed.
The data, supplied to AJ Bell by the National Fraud Intelligence Bureau, revealed this year looks set to hit record highs of fraud reports, including pension scams, despite the cold-calling ban, which came into force in January.
The data came as The Times conducted an undercover investigation into Action Fraud revealing failures in the system.
Undercover footage recorded by the newspaper showed police failing to investigate a number of fraud reports, and managers at the police crime reporting service mocking those who had lost money to scammers as “morons”.
AJ Bell senior analyst Tom Selby said the surge in investment fraud reports “might reflect the fact more people are now reporting being scammed to the relevant authorities, or it could be because fraudsters have shifted their focus to investment-based schemes”.
He added: “These figures clearly demonstrate that scams remain a clear and present danger to savers.”
Pensions Scams Industry Group chairwoman Margaret Snowdon said the rise in investment fraud is a “serious matter” and warned: “The problem is the money that is targeted is not pension scheme money. It is money that has passed into the hands of members. Schemes have no right to interfere in where people spend their retirement money if it is not a direct transfer from a pension scheme to the investment vehicle.”
Despite the surge in investment fraud reports, the number of pension fraud reports has drastically fallen in the past few years, with 345 recorded in 2018 – a contrast to 2015 when there were 1,353 reports of pension fraud.
Snowdon noted: “The pension scams risk is being seriously underestimated by basing only on reported crimes… We know that people don’t report pension scams and potential scams to Action Fraud as the reporting system is not designed to report such matters.”
The shift in focus from pension fraud to investment fraud reports raises questions about the government’s decision to exclude investments from the cold-calling ban.
Selby suggested the government should “review its decision “adding “although cold calling is just one tactic scammers use to target savers, it remains a common one which preys on the most vulnerable in society”.
Snowdon added: “Massive and persistent consumer awareness is needed and needed fast.”