25% of Investors Who Avoid Scams Inspired by Sherlock Holmes

Being the
legendary detective Sherlock Holmes, who solved the most complex mysteries of
London’s streets, was undoubtedly the dream of many British kids, who are now
active individual investors. A recent survey by the Financial Conduct Authority
(FCA) shows that one in four consumers who have avoided investment fraud in
recent years did not give up on their childhood dreams and drew inspiration from
the Holmes character to spot and report scammers.Sherlock Holmes-Like
Investors Spots Investment CrimeAccording
to FCA’s statement published on Tuesday, the data gathered from the regulator’s
helpline showed a 193% increase in scam reporting calls in the last five years, as retail
investors are getting better at identifying and detecting potential investment
scam red flags. Due to their commitment and timely notification, over £2
million of possible losses were foiled.The newest
research shows that 39% of respondents rely on their Sherlock Holmes-like
investigative or research skills to identify clues. In comparison, 32% trust
their intuition to differentiate between legitimate investment opportunities
and potential scams. These
‘detective’ investors identified mistakes (34%) and requests for
personal information (34%) as the most common red flags for investment scams,
along with unsolicited contact (33%) and high-pressure sales tactics (26%).”Scammers
are becoming more and more sophisticated, coming up with different tactics,
such as impersonation texts or calls, and using the cost of living pressure as
a way to tempt investors into false opportunities. Once money has been lost in
this way, it’s difficult to get back, so if something seems too good to be
true, it probably is. It’s great to see so many investors being able to spot
the signs of a scam, and helping others to do the same,” Mark Steward, the
Executive Director of Enforcement and Market Oversight at the FCA, commented.”You
don’t need to be a Sherlock Holmes to spot scams,” Steward added.Of the
1,036 investors surveyed by the FCA who avoided scams, 33% received the offer
via email and 25% through a personal phone call. Once they realized the offer
was a scam, 42% warned their family and friends, while 27% shared their
experience on social media to alert others.In April, <a href=”https://www.financemagnates.com/cryptocurrency/the-fca-announced-a-new-three-year-strategy-digital-assets-are-included/” target=”_blank” rel=”follow”>the FCA unveiled a new three-year strategy</a> to enhance outcomes for markets and retail
investors. The strategy centers on three main objectives: mitigating and
averting severe harm, establishing and assessing benchmarks, and encouraging
competition and favorable transformation within the industry.Watch the recent FMLS22 panel titled: “Regulation Roundup: Everything You Need to Know for 2023.”FCA Fights Scammers
and Rogue Financial AdsIn the age
of the Internet and social media ubiquity, the FCA’s role is no longer limited
to blocking the services of rogue investment market actors but also to identifying
advertisements of their fraudulent offerings.In
February, the regulator announced that it had rejected 8,582 financial
promotions in 2022, leading to the complete removal or alteration of their
messages. <a href=”https://www.financemagnates.com/fintech/uk-regulator-clamps-down-on-1400-more-rogue-financial-ads-in-2022/” target=”_blank” rel=”follow”>It is a considerable jump of 1,400%</a> compared to the 573 promotions
rebuffed in 2021. At the same time, the FCA issued 1,800 warnings against
scammers to protect British and foreign consumers.The growing
number of notifications requires the regulator to commit more resources. As a
result, the FCA <a href=”https://www.financemagnates.com/forex/fca-adds-1000-employees-in-2022-as-scrutiny-increases/” target=”_blank” rel=”follow”>hired an additional 1,000 officers in 2022</a> to better protect
consumers and respond more quickly to their calls.A separate
report by the Cypriot regulator <a href=”https://www.financemagnates.com/terms/c/cysec/” class=”terms__main-term” id=”37d97d82-59f8-4ce2-94d2-21c5bdc82663″ target=”_blank”>CySEC</a> noted that finfluencers, or financial
influencers, are becoming a growing problem amid the popularity of social media
in investing. They are becoming an authority for many individual traders. According
to a January CySEC survey, <a href=”https://www.financemagnates.com/forex/cysec-finds-31-of-retail-investors-rely-on-finfluencers/” target=”_blank” rel=”follow”>more than 30% of retail investors</a> base their decisions
on the opinions of finfluencers.