Skip to main content

Jump in scams in first half of 2023 as consumers warned to be on high alert for investment fraud

New figures show an almost 26% jump in fraudulent scams in first half of 2023 as consumers warned to be on high alert for investment fraud – FraudSMART

FraudSMART issues warning following recent spike in sophisticated investment fraud using the names and branding of well-recognised banks and investment firms

Thursday 1st February 2024 – Latest figures from FraudSMART, the fraud awareness initiative led by Banking & Payments Federation Ireland (BPFI), show a 25.6% jump year on year in authorised push payment (APP) fraud, involving online and mobile banking transfers, in the first half of 2023. Victims were conned out of a total of €8.6m euro over the same period.  Currently one of the most prevalent types of APP fraud is investment scams and following a recent spike seen by FraudSMART in highly sophisticated variants of these types of scams, consumers are now being warned to be on high alert

APP fraud happens where a fraudster tricks a person or business into sending money directly from their bank account to an account which the criminal controls. As well as including investment scams such as fake bonds they can also include romance, holiday or accommodation scams.

Speaking on today’s figures Niamh Davenport, Head of Financial Crime, BPFI outlined concerns at the rise in increasingly complex investment scams and described what consumers can do to protect themselves: “With today’s figures showing a large increase in the numbers of fraudulent scams in the first half of 2023, we are warning consumers to be extra vigilant in particular for investment scams. This follows a notable spike seen by our members in more highly convincing types of these scams, which are now using the names and branding of well-recognised banks and investment firms to draw in their victims.”

“In many of these investment scams, fraudsters hide behind websites, including product or investment comparison websites, which can appear to be legitimate. Consumers looking to invest, submit their details for more information and the fraudsters then call or follow up with an email, often including what looks like a high-end brochure. Once the victim has authorised the payment and the money has reached the criminal’s account, the criminal will quickly transfer the money onwards to numerous other accounts, often abroad, where it is then cashed out.”

Ms Davenport continued: “Investment scams are particularly targeted at those in the over 55 age bracket, and in the cases FraudSMART members have seen recently, the investment amounts can start from around €5k up to many multiples of this, with some cases reaching between €50k and €600k. While the amounts may be high, victims are not necessarily wealthy customers, but often people who have worked hard to build up a pension and are looking for a last opportunity to top up their finances ahead of retirement.”

Large networks of criminals creating increasingly convincing and deceptive scams

Ms Davenport illustrated the complexity of investment scams, stating: “In one reported incident a woman in her 50s, who had received some inheritance, invested €70,000 into what appeared to be a legitimate scheme. She did her own background research on the company and the ‘agent’ she was dealing with through a search engine and felt confident that it was an authentic product and so went ahead with the payment. Unfortunately, it turned out to be an elaborate scam. This example highlights the level of sophistication involved in some of these operations as large networks of criminals are creating increasingly convincing and deceptive ways of tricking consumers.”

FraudSMART is calling on the public to stay informed, alert, and secure

Appealing to the public to stay alert, Ms Davenport concluded: “While banks are using a range of measures to protect customers, fraudsters are increasingly targeting businesses and consumers directly, so it important for us all to know how to protect ourselves. In particular, be cautious of adverts online and on social media platforms, even if they are paid or sponsored ads using familiar brand or business names. Promises of high returns on investment websites or online adverts often lead people to share personal and financial information that can then be used for targeted scams. Pause for thought and contact the company independently to verify the details. If you have shared your bank details and realise it is a scam, report it to your bank and the Gardaí as soon as possible.”

Checklist to avoid investment scams:

  • Stop and think: Does this opportunity sound too good to be true? If so, it probably is.
  • Take your time: It is important to note that there are very few legitimate investment opportunities that require you to hand over or transfer money immediately.
  • Research thoroughly: Check the individual and firm for qualifications, credentials, reputation and history. The Central Bank Consumer Hub is a good place to start.
  • Verify the Information: Check all information with a trusted third party such as a legal/financial professional and consult family and close friends.