Investment scams: warning signs and the FCA ScamSmart checks
In short. Almost all UK investment scams share three features: a promise of high returns with little or no risk, pressure to invest quickly, and an unauthorised or cloned firm. The FCA's three-step ScamSmart check — verify the firm on the FCA Register, check the Warning List, and walk away from anything that fits the pattern — catches the vast majority of investment fraud.
UK Finance reported £612m in investment fraud losses across 2024. Cryptocurrency investment scams dominate new reports; 'clone firm' fraud (using the name of a real authorised firm) and 'recovery room' scams (offering to recover money for a fee after a first scam) are also common.
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Warning signs
- Returns of 8%+ a year described as 'guaranteed' or 'risk-free'
- Pressure to invest 'before this round closes' or with a deadline
- Cold-call, social-media DM, or unsolicited WhatsApp introduction
- Crypto, foreign exchange (forex) or 'CFD' trading platforms you've never heard of
- Glossy website with no FCA reference, or an FCA reference that doesn't match on the register
- Asked to pay a 'tax', 'release fee' or 'verification fee' before withdrawing 'profits'
- Investments in unusual physical assets — land, parking, storage, wine, carbon credits, hotel rooms
Clone firms
Clone firms copy the name, FCA reference and sometimes the website of a real authorised firm, then add a slightly different phone number, email or bank account. The FCA Warning List flags reported clones; always cross-check the contact details on the FCA Register with whatever the firm has sent.
ScamSmart three-step check
- Check the firm on the FCA Register at register.fca.org.uk
- Check the Warning List at fca.org.uk/scamsmart
- Get free Pension Wise guidance for pension-related investments (moneyhelper.org.uk/pensionwise)
- If the firm isn't authorised, you have no FSCS or Financial Ombudsman protection if it fails or turns out to be a scam
FAQ
Are cryptocurrency investments regulated by the FCA?
Most crypto trading is not regulated by the FCA for consumer protection (firms providing crypto services in the UK must register for anti-money-laundering purposes, but that doesn't include FSCS cover). The FCA's consistent guidance is that consumers should be prepared to lose all the money they put into crypto.
Will FSCS protect me if I'm scammed?
FSCS only covers losses from authorised firms within scheme limits. Money invested with an unauthorised firm — including a scam clone or unregulated overseas platform — is not protected.
What's a 'recovery room' scam?
After someone has been scammed, a second 'recovery' firm contacts them claiming to be able to recover the money for an upfront fee. These are almost always second-stage fraud. The FCA, Action Fraud and an authorised solicitor are the only legitimate routes to pursue recovery.