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Investment scams growing in frequency and complexity


Consumers are being warned to be on the alert for elaborate investment scams involving online and mobile banking transfers.

Figures from FraudSMART, the fraud awareness initiative led by the Banking & Payments Federation Ireland showed a year on year 26% increase in the incidence of such fraud in the first six months of last year.

In total, victims were defrauded to the tune of €8.6 million, the figures show.

The BPFI said investment scams were the most prevalent form of what are known as Authorised Push Payment, or AFP, fraud.

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.

It can include romance, holiday or accommodation scams as well as investment scams, such as fake bonds.

It is warning consumers to be on heightened alert for what it says are ‘highly sophisticated’ variants of such scams. They have been known to use the names and branding of 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,” Niamh Davenport, Head of FraudSMART said.

“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,” she explained.

The scams are targeted in particular at people aged over 55 who may be looking at investment opportunities to help fund retirement.

“The investment amounts can start from around €5,000 up to many multiples of this, with some cases reaching between €50k and €600k,” Ms Davenport said.

“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.”

In one incident cited in the report, a woman aged in her 50s who had received an inheritance invested €70,000 into what appeared to be a legitimate investment opportunity.

“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,” Ms Davenport concluded.


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