The Financial Ombudsman Service has issued a rare warning about a surge in investment scams over the past year, with half involving cryptocurrency cons.

The FOS said in Q1 investment scams formed 30% of all its complaints, up from 21% a year earlier, and some scam victims had lost hundreds of thousands of pounds.

The Financial Ombudsman upheld around 60% of investment fraud complaints in the consumers’ favour. 

The FOS says that some investment scams have seen consumers being cheated out of “tens or even hundreds of thousands of pounds.”

The Ombudsman is also concerned that the current economic crisis will tempt more consumers to invest in fake investments.

The number of investment scam complaints received by the FOS in a typical three month period has risen from 500 to 570 over the past 12 months and it says investment scams are the fastest growing “authorised” scam complaint that it receives.

Half of the investment scam complaints received in the first quarter of 2022 involved cryptocurrency, with typical scams involving a consumer being persuaded to purchase cryptocurrency through a legitimate intermediary and sending money to what they believed was a genuine investment platform but which is, in reality, run by fraudsters.

As part of its latest quarterly data publication, the Financial Ombudsman said investment scams had seen the biggest increase as a proportion of “authorised” scam complaints, despite the number of “authorised” scam complaints decreasing overall.

Separately, the Ombudsman received about 1,900 complaints about “authorised” scams against the consumer’s bank, compared to around 2,380 in the first quarter of 2021/22 (1 April – 30 June 2022). 

Romance scams rose from 11% to 12% of the total but the number of actual complaints was down from 262 to 228.

Authorised complaints for Q1 2022/23 compared to same period in 2021/22 

Nausicaa Delfas, interim chief executive and chief Ombudsman, said: “Complaints about investment scams are currently the fastest growing type of fraud complaint that the Financial Ombudsman Service receives. 

“We are concerned that, in current economic circumstances, people could be tempted to invest in fake investments. Our advice to consumers is be wary, conduct their own research, check the FCA register and contact the firm directly on the number listed.   

“If people feel they have been treated unfairly by their bank, they should contact the Financial Ombudsman Service, and we will see whether we can help.”