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Young Brits are putting themselves at risk of fraud by ‘investing money while watching Netflix’ says FSCS

  • 42% of Brits between the age of 18 to 24 who have money in investments say their latest investment was made while sitting in bed, watching TV/Netflix, at the pub, or coming back from a night out, according to new data from FSCS and the FCA.
  • As the number of investment scams rises, consumers are reminded to invest responsibly and securely.
  • FSCS launches the Investment Protection Checker, an easy way for consumers to quickly check the protection available for their investments.

Today, the Financial Services Compensation Scheme (FSCS) and the Financial Conduct Authority (FCA) reveal that of the 37% of UK adults who hold investments, almost half (44%) wished they’d spent more time researching their investment before making a decision, but don’t do so because it’s “time-consuming”, or “too complicated”.

The new research, which explores Brits’ attitudes towards investing, showed that when asked which tasks consumers spent the most time on, choosing a holiday (31%), buying a house (26%), doing laundry (24%), buying a car (24%) or checking social media (19%) were ranked as the top five choices. Researching investments was not as high up the list.

In fact, two in five (40%) of those who have made financial investments said they wished they’d spent longer doing so. This, raises concerns around the potential risks consumers can face, including investment scams, if they don’t know where they’re investing their money.

The findings also revealed that from those adults that held investments, more than a quarter (27%) said they were more likely to invest in an “investment opportunity” with a limited time frame, such as “[being] only available for the next 24 hours”. With time pressure being a common tactic used by scammers, the FCA advises checking the FCA Warning List to see if the investment firm is operating without authorisation.

Alarmingly, 22% of respondents say they haven’t checked or don’t know if their investment is FSCS-protected, putting them at risk of choosing investments with no possibility of compensation if something were to happen to the investment platform/provider. FSCS protection means that consumers can claim compensation of up to £85,000 against an FCA authorised firm that has failed.

The new data builds on FSCS and the FCA’s efforts to educate consumers on the importance of making informed choices on safe investing. With the launch of FSCS’ new online tool, the Investment Protection Checker, consumers are now able to check whether their investment is protected – and familiarise themselves with fraudsters’ tactics by checking the FCA’s ScamSmart page.

Additional findings from the study include:

  • More than one in 10 (11%) of those Brits who have made a financial investment said they invest because their friends are investing, with 26% saying they find it “fun”.
  • 14% of Brits who have made a financial investment stated they chose their investments because they were promoted by a celebrity or influencer via social media.
  • Brits aged between 18 and 24 who have made a financial investment were more likely to invest while watching TV/Netflix (13%), at the pub (11%), or coming back from a night out (7%) compared to those over 25.

Lila Pleban, Spokesperson for FSCS, said:With almost two in five adults holding investments in the UK, it’s clear there’s a growing appetite to start investing as online platforms are making it easy and accessible for everyone. But as our findings show, carving out time to research and look into investment opportunities is not always top of people’s to-do lists and unfortunately, puts them at a higher risk of being scammed or putting their money with an unprotected platform or provider.

“While FSCS can’t offer protection for consumers if they are the victim of a scam, our new Investment Protection Checker offers an easy and quick way for consumers to check whether the investment they are looking to make is protected – empowering them to make informed decisions about where to put their money.”

Mark Steward, Director of Enforcement of the FCA, said: “Fraudsters will always find new ways to target consumers, so make sure you do your homework and spend some time doing research. Just a few minutes can make a big difference to your investment choices. 

“Make sure you’ve carried out the relevant checks. Before you invest it’s a good idea to follow these steps:

  • Familiarise yourself with the warning signs of a scam. This includes, but isn’t limited to unexpected or unsolicited contact, pressure to make a decision within a set time window and unrealistic returns. Check the full list on the ScamSmart website.
  • Check the FCA Warning List. This will tell you whether the firm you’re dealing with is known to be operating without FCA authorisation.
  • Check the FCA Register to verify the person you’re dealing with is who they say they are.
  • Confirm that your investment is eligible for FSCS protection with the new Investment Protection Checker.

“Be a ScamSmart investor and make sure you always check before you invest. If you’re unsure, don’t invest.”

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