Experienced Investors Are Most Common Investment Scam Victims

by Robin Pilgrim, LawAndTax-News.com, London

14 October 2004

A study recent concluded by the UK's Financial Services Authority (FSA) has revealed that experienced investors are the most common victims of investment scams such as 'boiler room' operations, which take investors' money promising high returns, and then vanish.

Of the 105 investors who participated in the survey, the majority of victims were male (87%). Most callers to the FSA's consumer helpline were aged 35-55 (44%), although a large percentage of calls were from people over 55 years old (42%), with retired people comprising 22% of the calls.

Although callers had a variety of backgrounds, nearly 30% were professionals or directors. When asked how many years of investment experience they had, 41% of callers answered that they had been investing for over 10 years, and only 12% had never made an investment before.

Speaking with regard to the survey results, Andrew Procter, director of enforcement at the FSA, observed that:

"These figures dispel the myth that it's just the novice investor who falls victim to investment scams. It is clear that professionals who have been making investments for many years are also particularly vulnerable. Anyone who is considering making an investment should remember: if it sounds too good to be true, it often is."

The FSA is currently aware of 113 unauthorised investment firms which operate from overseas and are targeting UK investors.

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