The Financial Conduct Authority (FCA) has launched a national campaign to warn people about investment fraud and how to spot a potential scam.

Investment scams generally involve high-pressured selling, using boiler room tactics, for products which often do not exist, including land-banking schemes, carbon credits and rare earth metals.

“Those operating investment scams use very sophisticated techniques to build trust and can dupe even experienced investors out of their savings,” explained Martin Wheatley, chief executive of the FCA. “With large numbers of people at risk, it’s important to know how to spot the signs of a potential scam.

“We would caution against anyone taking a risk on a firm or individual who isn’t authorised by the FCA. Our message is simple, don’t accept a cold call.”

The average investor loses around £20,000 and the FCA receives around 5,000 calls a year from investors about suspected investment fraud.

In the last year, the FCA processed 6,593 reports of suspected unauthorised activity, issued 295 consumer warnings and secured the removal of 61 websites promoting suspected boiler rooms. The FCA has also secured criminal convictions against 4 individuals who were involved in unauthorised activity, including running fraudulent investment schemes. It has also taken 8 civil injunctions this year.

The FCA has seen examples of fraudulent websites that mimic those of legitimate firms and investment brochures that would be likely to convince even an experienced investor that the product was genuine.

Those most at risk of investment fraud are people in retirement who are actively seeking an investment opportunity. One consumer told the FCA that he was called out of the blue by a firm that offered to buy the shares that he held in a company. The deal sounded legitimate and the website looked professional. It wasn’t until he was asked to pay a £5,000 bond to enable the deal to go through that alarm bells rang.