Investment scams: warning signs and how to verify a firm
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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. Three checks before you invest — verify the firm on the public authorisations register, search the regulator's warning list for reported clones, and walk away if anything doesn't match — catch 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.
Content updated: 3 min read
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 regulator's warning list flags reported clones; always cross-check the contact details on the public authorisations register with whatever the firm has sent.
Three checks before you invest
- Search the public Financial Services Register for the firm's name and reference number — use only the contact details listed there, not those the firm gave you
- Check the regulator's warning list of unauthorised firms and reported clones
- Walk away if the firm isn't authorised, pressures you to decide quickly, or promises guaranteed returns — you won't have FSCS or Financial Ombudsman protection
Common questions
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, Report Fraud and an authorised solicitor are the only legitimate routes to pursue recovery.