Banks warn of rise in 'highly convincing' investment scams targeting over-55s

FraudSMART said one red flag to watch for is receiving an unexpected telephone call, e-mail or social media message about an investment opportunity

Niamh Davenport of FraudSmart.ie said: "While the amounts may seem high it’s important to point out that the victims are not necessarily wealthy customers, but often people on low to average incomes who have worked hard all their lives to build up a pension and are at a stage where they are looking for a last opportunity to top up their finances ahead of retirement."

There has been a rise in serious investment scams, in particular those targeting people over the age of 55.

FraudSMART, the banking sector's fraud awareness initiative, says these scams are highly convincing, appear legitimate and are often seeking investments of €20,000 and upwards.

Brochures using the names and branding of well-recognised, legitimate bonds and investment schemes are being circulated by fraudsters and advertised online.

Outlining how consumers are being caught out, Head of Financial Crime with BPFI, Niamh Davenport, said: “In recent months, FraudSMART members have noticed a rise in very serious and elaborate investment scams and the numbers are continuing to increase. 

"The fraudsters hide behind websites, including product comparison websites, which appear to be legitimate and also make contact via cold calling, unsolicited emails, social media and text messages.” 

According to Ms Davenport, not all victims of these scams are wealthy and most are heading for retirement age.

She said: “Initial indications suggest that the scams are particularly targeted at those in the over-55 age bracket with a minimum investment of €20,000 and in many cases upwards of that. 

"While the amounts may seem high it’s important to point out that the victims are not necessarily wealthy customers, but often people on low to average incomes who have worked hard all their lives to build up a pension and are at a stage where they are looking for a last opportunity to top up their finances ahead of retirement. 

In one reported incident an older customer was about to invest €60,000 from their pension into what appeared to be a legitimate scheme. 

"Fortunately, the customer made a call directly to their bank before pushing the payment through and this meant that the fraud was identified and averted.”

Ms Davenport went on to urge consumers to be vigilant, alert and aware.

She said: “I think we would all like to believe that we would recognise a scam if we saw it, but the truth is any of us can fall victim to fraudsters if we’re not on the alert. 

"It is really important for consumers, particularly those coming close to or at retirement age who are a key target group right now, to be aware that the scams offer very convincing investment opportunities and once the money is ‘invested’ it disappears with no redress once the money is handed over to an unregulated ‘firm’. 

The rule of thumb is ‘if it looks too good to be true it probably is'.

According to FraudSMART, there are a number of red flags that people should look out for. 

For example, receiving an unexpected telephone call, e-mail or social media message about an investment opportunity. Being rushed or pressured into making a decision on the spot with no opportunity to consider the details would also be considered a red flag.

In order to avoid investment scams, FraudSMART advises consumers to stop, think and take your time. They say that there are very few legitimate investment opportunities that require you to hand over money immediately.

They also stressed how important it is to research thoroughly and look out for qualifications, credentials, reputation and history. And finally, FraudSMART encourages consumers to verify any information they receive with a trusted third party such as a legal or financial professional and consult with family or close friends.