Advanced fee & investment fraud

Advance Fee Fraud

Advance Fee Fraud is an umbrella term to describe a particular fraud type where the criminal convinces a victim to make upfront payments for goods, services and/or financial gains.  But the goods/services don’t exist.

Many different types of Advance Fee Fraud using various techniques and scams are used by criminals.  Some of these (including Romance Fraud and Recruitment Fraud) are covered more in-depth later in this book.  However, the numerous different tactics used by criminals means it’s worth describing the basic technique behind the fraud; the criminal will offer something to you, but in order to progress, you’ll need to pay something up front.

Below is a list of types of Advance Fee Fraud.  This list is by no means exhaustive!

Clairvoyant or Psychic Fraud– The criminal predicts something significant in your future, but they need money to provide a full report.

Cheque Overpayment Fraud – The criminal overpays for something with an invalid cheque, and asks for change.

Fraud Recovery Fraud – Once you’ve been a victim of fraud, the criminal contacts you, claiming that they can recover your losses, for a fee.

Inheritance Fraud – The criminal tells you that you’re in line to receive a huge inheritance, but you’ll need to pay a fee to release the funds.

Loan Fraud– The criminal asks you to pay an upfront fee for a loan.

Lottery Fraud – You’re told you’ve won a prize in a lottery, but you’ll need to pay the criminal an admin fee.

Racing Tip Fraud – The criminal offers racing tips that are “guaranteed” to pay off, for a small fee.

Rental Fraud – The criminal asks for an upfront fee to rent a property, which may not be theirs, or even may not exist.

West African Letter Fraud (aka 419 Fraud) – The criminal asks for help moving a large sum of money from one country to another, promising to cut you in, but asks for a payment upfront first.

Work from home Fraud – The criminal offers you to make easy money working from home, but you need to pay a fee in advance, for business leads, or a website.

Vehicle Matching Fraud – The criminal contacts you just after you’ve placed an advert trying to sell something (usually a car).  They ask for a “refundable” fee to put you in touch with a non-existent immediate buyer.

How to protect yourself

  • Be extremely wary about giving money to anyone upfront, especially a stranger, for any reason.
  • If they claim to be an official, double check their identity, but don’t do so using any contact details they give you.
  • Don’t be pressurised into making a decision in that moment.  Always take time to think, don’t forget to Take 5.

REMEMBER – Criminals will try any lie to get your money

CAUTION – Don’t give money upfront if you have even the slightest suspicion

THINK – Why should I give this person money?  Why have they targeted me?

Investment Fraud

Investing in stocks and shares or any other commodity can be a successful way of making money. However, it can also lead to people losing their entire life savings. Fraudsters will persuade you to invest in all kinds of products. They will offer you high rates of return, particularly over longer periods of time, which often do not exist.

Common products that will be offered include binary options, virtual currency, carbon credits, wine, rare metals, gemstones, land and alternative energy. Often, initial investments will yield small returns as an incentive to invest further funds. However, larger investments or cashing out will be met with excuses or a penalty charge. Eventually contact with the fraudster will be impossible and all funds and bogus returns lost.

Fraudsters are organised and they may have details of previous investments you have made or shares you have purchased. Knowing this information does not mean they are genuine.

Criminals may direct you to well-presented websites or send you glossy marketing material. These resources do not prove they are a genuine company. Many fraudulent companies have a polished customer image to cover their illegal activities.

It is relatively easy to register a company with Companies House. This does not confirm or endorse that they can provide genuine investments. Indeed, emerging investment markets may be unregulated, making these open to abuse.

Companies may be registered at prestigious addresses, for example Canary Wharf or Mayfair. This does not mean they operate from there. It is an accepted business practice to rent such a virtual office to enhance a business’s status. However, fraudsters are also aware of this and exploit it.

The fraudster may put pressure on you by offering a ‘once in a lifetime opportunity’ or claim the deal has to be done quickly to maximise profit.

In addition – be wary of companies that offer to ‘recover’ any funds you have lost to any sort of investment scam. They may be linked to the company who initially defrauded you in the first place and may be targeting you again.

This is known as ‘Recovery Fraud’.

How to protect yourself

  • There are no get rich quick schemes. If it sounds too good to be true, it probably is.
  • Genuine investment companies will not cold call you. Be extremely wary of anyone who does.
  • Research both what you have been offered, and the investment company.  Speak to Trading Standards if you have concerns.
  • Before investing, check the Financial Conduct Authority register ( to see if the firm or individual you are dealing with is authorised
  • Check the FCA Warning List of firms to avoid.

REMEMBER – Don’t be pressured into making a quick decision.

CAUTION – Seek independent financial advice before committing to any investment.

THINK – Why would a legitimate investment company call me out of the blue?