INVESTMENT fraudsters are using increasingly sophisticated tactics to part people from their savings, and this is the most dangerous time of year for it. Yet many potential targets admit they would not know they were being scammed until it was too late.

According to national reporting centre Action Fraud, financial con artists are known to have stolen over £197 million last year, an average of £29,000 per victim.

Pension-related scams were especially costly, with the latest figures showing a typical loss of £91,000, while some people said goodbye to over £1m.

The true total is likely to be far higher, though, as Action Fraud believes that when many victims realise what has happened, they are too embarrassed to alert the authorities.

Action Fraud director Pauline Smith said: “Investment fraud is a major threat, with fraudsters doing everything they can to manipulate potential victims into making investments.

“Victims are often coerced or persuaded into parting with significant amounts of money and this can have a devastating impact on their wellbeing and finances.”

In the past, pension scam victims often reported receiving plausible cold calls offering free financial reviews and the chance to release cash and achieve high rates of return. However, a ban on pension cold calling that came into force in January means no legitimate firm should now make contact this way.

Partly as a result of this clampdown, fraudsters of all kinds are increasingly turning to the internet instead, reaching potential victims by email, professional looking websites and even social media channels such as Facebook and Instagram.

Mark Steward, the Financial Conduct Authority’s (FCA) executive director of enforcement and market oversight, said: “Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate.”

The commonest cons involve investment in shares and bonds, foreign and digital or virtual currencies, and scammers are particularly active towards the end of the financial year, when people are most open to new opportunities.

Mr Steward explained: “The first quarter of the year is a common time for people to make their financial plans for the year, including investments.”

Scammers frequently focus on the growing population of over 55s, because of their retirement savings.

Worryingly, research by the FCA found that only two out of five people in this age group are confident they could spot an investment con.

More than half of those surveyed believe it is important to act quickly to get a good deal, fewer than half expect to seek impartial advice before making an investment, and a third are reluctant to discuss their investment decisions with others.

Nine out of 10 are aware that being contacted unexpectedly can be a warning sign, but fewer than a fifth would be on guard if promised returns above the market rate.

These attitudes and lack of knowledge play into the hands of fraudsters, who say their opportunities are time-limited, that others want in on the deal or have already benefited, and that details must be kept secret so only the select few can take part.

Unfortunately for those who go ahead, this could be the last time they see their cash, as money handed over to unauthorised firms is not protected by the Financial Ombudsman Service or Financial Services Compensation Scheme.

Mr Steward said: “Be alert to the warning signs like being contacted out of the blue, promises of low-risk or guaranteed above-market returns, special deals just for you, time pressure and, very often, flattery.

“Be vigilant. Don’t let them push you into making a decision and parting with your money. Question their claims.”

Other common tactics include attempting to build a friendship to lull targets into a false sense of security.

There may be a bonus or discount on offer for investing before a set date or only a short window of availability.

Their claims will frequently be backed up by convincing literature and websites, fake reviews and promises that they are fully regulated and experienced.

Mr Steward warned: “Before you invest, do your homework. Always check the FCA’s register to make sure you’re dealing with an authorised firm, and use the contact details on our register, not the details the firm gives you, to avoid clones.

“Also check the FCA list of firms to avoid. Remember, if in any doubt – don’t invest.”