Around 800,000 people reported losing money to investments or pensions‑related scams with a growing use of social media to dupe investors in the 12 months to May 2024.

Responding to the soaring number of investment scams, the Financial Conduct Authority (FCA) has launched a handy Firm Checker tool so people can check out whether the firm that has approached them is bona fide and authorised by the regulator.

People can use the tool to check if a firm is authorised and has the correct permissions to provide services, significantly reducing their chances of falling victim to fraud.

In the UK, almost all financial firms must be FCA authorised or registered. ‘While it won’t remove all risk, using an authorised firm with the correct permissions will greatly reduce your risk of harm,’ the FCA said.

Scammers make it difficult for consumers to know if they are dealing with the real firm. In addition to checking if a financial services firm is authorised by the FCA for the services being offered, people should also confirm that the contact details match those listed on the FCA Firm Checker.

In the 12 months to May 2024, 14% of adults (7.5m) reported experiencing a fraud or scam related to banking, payments, pensions, and/or investments, revealed the FCA’s Financial Lives annual survey.

In more than two in five (44%) instances, adults first heard about the fraud or scam through a traditional channel, such as a telephone call, text message, or email, revealed the latest FCA Financial Lives survey.

Social media is also increasingly influential, accounting for 21% of promotions, with consumers seeing ads or videos promoting the investment scam.

In one in three instances, they first came across it online: in 21% of cases via a social media advert, post, or message, 9% through a copycat website, 7% via an advert on a search engine, and in 2% were AI‑generated scam adverts or promotions.

Sheree Howard, executive director of authorisations at the FCA, warned: ‘Ruthless fraudsters are constantly evolving their tactics so they can steal money from innocent victims.

‘Whether you’re considering an investment, pension opportunity, loan or other financial service, use Firm Checker to confirm the firm is authorised and help fight financial crime.’

The FCA warned that consumers are not taking enough precautions to protect themselves against fraud, saying there was ‘room for improvement’.

Many do take precautions against fraud: 72% reject or ignore unsolicited contacts, 68% regularly check bank and credit card statements, and 62% ignore unexpected weblinks. However, far fewer check whether financial firms are FCA‑authorised (27%) or monitor their credit reports for unusual activity (26%).

Another major concern was that 40% of adults ‘did not verify the authenticity of emails, messages or calls before providing personal or financial information’.

Nearly one in five people caught out by authorised push payment (APP) fraud, including purchase or impersonation scams, and unauthorised consumer investments or pensions-related fraud, saw promotions on social media (17%) or were approached with a telephone call (17%).

Nearly as many (16%) targets of APP fraud were initially approached via text message, WhatsApp or another messaging service.

FCA website, FCA Firm Checker tool