Search engines such as Google and Microsoft’s Bing provide an easy hunting ground for criminals who target victims via paid-for adverts, while the spike in investment scams is pushing regulators and law enforcement to the limit, warns Which?.
Action Fraud received more than 17,000 investment scam reports in the year to September 2020, up 28% on the previous year, with total losses reaching £657m – and many more cases go unreported.
The financial uncertainty created by the pandemic has played into scammers’ hands: the Financial Conduct Authority’s (FCA) warning list of firms potentially running investment scams doubled from 573 in 2019 to 1,184 in 2020 – yet three in 10 investors surveyed by Which? had never even heard of it.
Many firms on the warning list initially advertised on either Google or Bing, having paid to appear at the top of search results for terms such as ‘best bonds’ and ‘best fixed-rate bonds’. We’ve found that such adverts have remained for weeks after the FCA issued warnings to avoid them.
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A Which? survey of 206 investment scam victims found that while one in seven were targeted by phone, four in 10 were targeted via online methods.
Online methods included via email (12%), search engines (10%), adverts on Facebook (9%) or other non-social media/search engine online adverts (8%).