What it means for youRights, refunds & scams
Spotting investment scams: the warning signs, clone firms and your refund rights
New FCA research says young investors miss pressure tactics they would spot in a horror film. Here is how to check a firm and what to do if you are scammed.
Published 31 October 2026Last checked 31 October 2026UK-wideFrom Financial Conduct Authority
Illustration generated with AI
What's happening
New research for the Financial Conduct Authority (FCA) found that young investors spot pressure tactics in horror films far more easily than the same tactics in investment offers. The Financial Ombudsman Service says people aged 18 to 29 brought more than 6,200 fraud and scam complaints in the year to August 2026. This explains the warning signs, how to check a firm is real, and what refund rules apply if you are scammed.
The question: How can you spot an investment scam or clone firm, and can you get your money back if you are caught out?
The policy
- Announced by
- Financial Conduct Authority and Financial Ombudsman Service
- Announced on
- 2026-10-30
- Stage
- in force
- Takes effect
- Refund rules apply now to bank transfers made since 7 October 2024
- Someone tricked into sending £3,000 by bank transfer to a fake investment: Can claim a refund from their bank within 13 months. The bank can take off up to £100 unless they are vulnerable.
£3,000 minus up to £100 = at least £2,900 back (illustrative calc)
- Someone who bought crypto and sent it to a scam platform: The ombudsman says this is not covered by the bank transfer refund rules. They could still complain to their bank and then the ombudsman if they think the bank should have stepped in.
- Someone who invested through a clone of a real firm: No FSCS protection, because the clone isn't authorised. Report it and contact your bank quickly.
This applies to you if…
- You have been contacted out of the blue about an investment
- You are being pushed to decide quickly
- Friends or a group chat are excited about a new opportunity
- Someone says the FCA Register details for their firm are out of date
Not for you if…
- Losses from a real investment that simply fell in value (no scheme covers this)
What it's worth
Payment Systems Regulator rules for UK Faster Payments and CHAPS transfers made since 7 October 2024. Banks can take off up to £100, but not for vulnerable customers. Card, cash and cheque payments have separate protections.
How to do it
- 1
Pressure to act fast, returns that look too good, being told to keep it secret and flattery are all warning signs the FCA lists.
- 2
Check the firm on the FCA Firm Checker
Make sure the firm is authorised for that product and its firm reference number matches what you were given.
- 3
Contact the firm using the details on the Firm Checker
Clone firms copy a real firm's name and number but change the phone, email or website. Use only the contact details shown on the FCA Firm Checker.
- 4
It lists firms the FCA knows are operating without permission. A firm not on the list can still be a scam.
- 5
If you have paid, call your bank on 159
159 reaches the fraud team at many UK banks. Then report it: Report Fraud on 0300 123 2040 in England, Wales and Northern Ireland, or Police Scotland on 101.
Deadline
Report a bank transfer scam within 13 months
Under the Payment Systems Regulator rules, banks should normally refund within 5 business days, or decide within 35 business days if they need to look into it further.
The catches
No FSCS or ombudsman cover with unauthorised firms
The FCA says if you deal with an unauthorised firm you won't be protected by the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service can't help.
Crypto payments are usually not covered
The ombudsman says investment scams and task-based job scams paid for with crypto are not covered by the bank transfer refund rules.
Refunds can be refused in some cases
Banks can refuse if you took part in the fraud or were 'grossly negligent'. The gross negligence exception doesn't apply to vulnerable customers.
Being on the Register isn't enough
Clone firms use real firms' details. Being authorised also doesn't remove all risk from an investment.
Illustrative example
Jordan and a 'last chance' crypto offer
Jordan, 26, sees a group chat buzzing about a new coin. An 'account manager' messages him saying the price is about to jump and the offer closes tonight.
- The urgency, the 'new' offer and the group chat excitement are all pressure tactics the FCA describes.
- Jordan checks the firm on the FCA Firm Checker. The name matches a real firm, but the phone number does not.
- He calls the number shown on the Firm Checker. The real firm says it has no such offer.
- He reports the messages and doesn't pay.
Jordan avoids the scam. If he had paid by crypto, the bank transfer refund rules would probably not have helped.
Illustrative example, not a real case.
What this means for…
- Under 25: Young people brought one in five fraud and scam complaints to the ombudsman in the year to August 2026.
- 25–54: The FCA survey covered investors and would-be investors aged 18 to 40.
- Investor: Hype, urgency and 'new' offers are the tactics the FCA says investors miss most.
Common misreadings
You might hear: It's on the FCA Register, so it's safe.
Actually: Clone firms copy real firms' names and numbers. Only use the contact details shown on the FCA Firm Checker.
You might hear: It isn't on the FCA Warning List, so it must be fine.
Actually: The FCA says a firm not on the list may still be unauthorised or a scam. Scam firms often change their names.
You might hear: My bank will refund any scam.
Actually: The £85,000 refund rules cover UK bank transfers (Faster Payments and CHAPS). Crypto-paid investment scams are usually not covered.
Where the UK nations differ
- England, Wales and Northern Ireland
- Report fraud to Report Fraud (which replaced Action Fraud) on 0300 123 2040.
- Scotland
- Report fraud to Police Scotland on 101.
What you could do
have been offered an investment
Check the firm on the FCA Firm Checker and call it on the number shown there
think you have been scammed by bank transfer
Call your bank on 159 and ask about a refund under the reimbursement rules
get a suspicious text or email
Timeline
7 October 2024
Bank transfer scam refund rules start
4 December 2025
Report Fraud replaces Action Fraud
30 October 2026
FCA research and ombudsman scam warning published
The detail
The rules
- The FCA survey was run by Attest on 9 October 2026 with 666 UK people aged 18 to 40 who own investments or would consider buying them in the next 12 months.
- 65% saw 'this is your only chance' as a warning sign in a horror film. Only 36% said a 'last chance to buy' investment would make them more cautious.
- 80% saw 'everyone's doing it' as a warning sign in a horror scene, but 29% said excitement from friends or group chats would reassure them about an investment.
- The ombudsman received almost 30,000 fraud and scam complaints in the 12 months to 31 August 2026. About half involved authorised push payment fraud, where you are tricked into sending a transfer yourself.
- The government plans to move the Payment Systems Regulator's work into the FCA. This needs new law, and HM Treasury says the refund rules will be carried over.
- The FSCS covers up to £85,000 per person per authorised investment firm that failed after 1 April 2019. It doesn't cover poor investment performance.
References
- FCA press release, 30 October 2026: Survey of 666 investors aged 18 to 40
- Financial Ombudsman Service, 30 October 2026: 6,200 complaints from 18 to 29 year-olds
- Payment Systems Regulator: Refund rules for bank transfer scams
Words explained
- Clone firm
- A scam that copies the name and details of a real, authorised firm.
- FCA Register
- The official list of firms and people the FCA allows to offer financial services.
- Authorised push payment (APP) fraud
- When you are tricked into sending money from your own account to a scammer.
- FSCS
- The Financial Services Compensation Scheme, which pays out if an authorised firm fails.
- 159
- A phone number that connects you to the fraud team at many UK banks.
In short
Scammers use the same tricks as horror films: urgency, something 'new' and everyone else doing it. Check any firm on the FCA Firm Checker and only call the number shown there. If you are tricked into a bank transfer, call your bank on 159. You can claim up to £85,000 back within 13 months.
Related dates
- 18 Nov Car finance 'not owed' letters due (agreements from April 2014)Deadline · in 18 days
- 18 Jan Car finance 'not owed' letters due (agreements before April 2014)Deadline · in 79 days
- 16 Feb Car finance compensation scheme legal challenge hearingDecision · in 108 days
Sources
- Brits nearly twice as likely to spot pressure tactics in horror films as investment red flags, FCA (2026-10-30)
- Financial Ombudsman Service warns young people to stay alert to online scams, Financial Ombudsman Service (2026-10-30)
- APP fraud reimbursement protections, Payment Systems Regulator
- ScamSmart, FCA
- Clone firms and individuals, FCA
- FCA Warning List, FCA
- How to check a firm or individual is authorised, FCA
- Report Fraud: new service from City of London Police, GOV.UK
- Reporting fraud, Stop Think Fraud (GOV.UK)
- Investments: what we cover, FSCS
This is guidance, not regulated financial advice. Check figures against the linked official source before you act. Written with AI assistance and checked against primary sources. How Kitty works. For free, impartial help, try MoneyHelper or Citizens Advice.