NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

How to avoid investment ISA scams

How to avoid investment ISA scams
Image source: Getty Images


Investment ISA scams are April’s ‘scam of the month’, according to recent information released by Metro Bank.

While money scams have been around for a long time, investment fraud has been on the rise during the pandemic. In fact, research shows that the average victim of investment fraud lost £45,000 in 2020.

Now, reports are coming in that investment ISA scams are on the rise, adding a new layer of danger for those dipping their toes into the market.

Plot your path towards financial freedom with our Hero’s Journey tool!

MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.

This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.

Adam Speakman, head of fraud and investigations at Metro Bank explains, “There is always an element of risk in investment – but the risk should come from the movement in market conditions, not from being defrauded by criminals.” 

How investment ISA scams work

Investment ISA scams are common at the start of the new financial year, which is why April seems to be prime time for them, according to Speakman.

ISA scams work by offering good return rates, tempting people looking to jumpstart their new financial year. “Not only is the offer fake, but so too are the reviews from supposedly happy investors,” says Speakman.

It can sometimes be tricky to differentiate an ISA investment scam from a real offer, but Speakman says you should be concerned if the rate of return seems too good to be true. Other warning signs are finding the offer via social media or receiving an email about it out of the blue.

If they tell you “it’s now or never”, you should hear alarm bells. “If you are being pressured to act quickly, move funds or share passwords, you need to STOP and THINK,” Speakman adds.

When in doubt, always ask for the name and details of the company offering the ISA. Then check that they’re authorised by the Financial Conduct Authority to offer the deal. If they’re not registered with the FCA, there’s a clear risk that it’s a scam.

Compare stocks and shares ISAs

If you’re planning to open a stocks and shares ISA, choosing the right platform is important. To help you narrow down the choices, we’ve created a list of some of the top stocks and shares ISAs.

Other investment scams to be aware of

Metro Bank says April also sees an uptick in other financial scams, including HMRC scams. Some of these include messages trying to scare you into paying supposed fees or penalties.

But Speakman says HMRC will never call to threaten you into making payments. If you hear that on the phone, it’s a sign of a scam. “Always take the caller’s details and terminate the call then check the HMRC website for the latest and common scams,” Speakman suggests.

Other financial scams to be aware of include: 

  • Cryptocurrency scams involving coins that don’t really exist 
  • Binary options 
  • Early pension release 
  • Unregulated assets such as gold or diamonds
  • Forex trading offering guaranteed returns 

If you’re considering an investment, the Money Advice Service recommends checking the FCA register of regulated companies and looking for warnings. Unless you’re familiar with investments, it’s also wise to seek independent financial advice so you know the risks of anything you’re getting into. 

This is especially important if you’re looking into unregulated or ‘niche’ investments. These aren’t always covered by the FSCS or FOS, so the risk is greater. 

Are you making these 3 common investing mistakes?

These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold….

To help you side-step these pitfalls, and move forward on your path to wealth-building, we’ve created a free report, “The 3 Worst Mistakes New Investors Make”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.