Fraud prevention – how to recognise and avoid investment scams

Investment scams continue to evolve and often target individuals with both experience and capital. Being informed and prepared is one of the most effective ways to protect yourself. One simple principle underpins much of our fraud‑prevention advice – take the time to pause and think about protecting yourself, before you invest. A moment to stop and reflect can reduce stress, protect your interests and help prevent significant financial loss.

Many of our clients lead busy professional and personal lives. At certain times of year — such as at the beginning of a new year and around tax deadlines — it is natural to feel under pressure and focused on meeting various commitments.

Fraudsters understand this. They deliberately approach potential victims when they are more likely to be distracted or time‑poor.

Our research also tells us that:

• Nearly half of people would consider taking a risk for an attractive opportunity
• Around one third might act quickly to secure a deal

Criminals rely on urgency, excitement and the promise of reward. Creating space to pause — even briefly — can help break that pressure and allow more considered decisions.

What is an investment scam?                                                    

An investment scam occurs when someone is persuaded to invest their money into an opportunity that is misleading, misrepresented or entirely fictitious. The rates of return bring offered may be above the market average but often seem believable, rather than outlandishly high, or the deal may promise things like guaranteed returns.

How these scams typically work

Investment scams can present themselves in many forms. You may be offered:

• An exclusive or “private” opportunity
• A chance to invest ahead of others
• A proposition presented as time‑limited or unavailable elsewhere

Fraudulent approaches often increase around major financial events, such as the Budget or in the lead up to the new tax year, when offers can be positioned to sound timely, credible and well‑informed.

Criminals may assume that wealthy individuals:

• Have funds available to invest
• Are familiar with investment concepts
• Move in circles where alternative or specialist investments are discussed

Typical warning signs include:

• Promises of unusually high or consistent returns
• References to others who have already benefitted
• Pressure to act quickly, with encouragement to invest larger sums

Once an initial payment is made, fraudsters may continue contact to maintain a sense of legitimacy, ask for additional funds, or attempt to discourage independent checks. In some cases, they will simply disappear.

Pause before committing to any investment.

Taking a step back allows you to consider key questions:

• Was this an opportunity I was actively seeking?
• Does the return match the level of risk involved?
• Am I being encouraged not to discuss this with others?

Practical safeguards include:

• Talking the opportunity through with someone you trust
• Undertaking your own research into the investment and the market
• Checking the FCA Register to confirm whether the firm is regulated
• Being cautious of claims that an investment is confidential or restricted by a non-disclosure agreement (NDA) — this can sometimes be used to limit scrutiny

Allowing yourself time to reflect introduces perspective and reduces the impact of pressure.

We are here to help you feel confident and well‑supported when making financial decisions.

• Coutts 24
  Our team is available at any time if you would like to discuss a potential investment, sense‑check an opportunity or raise a concern.
• Your challenge word
  Using a challenge word helps ensure you are speaking with a genuine Coutts colleague. If you don’t have one in place already, your private banker can assist you in setting this up.
• An open, supportive approach
  Fraud can affect anyone. There is no judgement in seeking advice or raising concerns — doing so can help protect you and others.
• Further guidance
  Explore our dedicated fraud hub which provides clear and up‑to‑date information to help you stay informed and keep your money safe

Our fraud specialists:

• Operate robust, layered security and monitoring processes
• Continually review and enhance how we protect our clients
• Work closely with industry partners and law enforcement
• Share intelligence to support wider efforts to prevent fraud