UK's Regulatory Authority FCA Announces A New Plan To Combat Investment Scams
Patricia Owens October 8, 2021 0
The financial regulatory body in the United Kingdom, Financial Conduct Authority, announced today that it has come up with a new strategy to combat investment scams. The regulatory authority also highlighted that there are measures on the ground to encourage individuals and institutions to invest in regulated financial instruments.
Based on the strategy introduced recently, the FCA is looking to reduce the number of consumers exposed to high-risk investments products by half by 2025. The regulatory agency also pledged to publish the outcome of the newly introduced strategy in the nearest future.
In years to come, the Financial Conduct Authority will introduce new effective measures to detect and prevent investment scams and frauds. It was recorded that in the space of 2020-2021, investors in the United Kingdom lost close to £570 million to scams. Also, the number of investment scams has increased substantially in the United Kingdom since 2018.
For this mission to materialize, the FCA has highlighted some set of measures to be taken, including the launch of a new investment harm campaign worth £11 million, to ensure consumers are informed better on the accurate investments decisions to be made and ultimately reduce the number of investors exposed to inappropriate investments with huge risks.
Speaking on the new announcement, the Executive Director of Markets at the Financial Conduct Authority, Sarah Pritchard, said: "There has never been enough freedom for investors as technology has democratized the financial market. New products are becoming more available daily, and people are getting better access to their life savings than before. But it is good to know that there are risks attached to freedom. Our mission is to give consumers the needed confidence to invest safely while understanding the level of risk involved with every investment they choose."
In August 2021, ACCC (Australian Competition and Consumer Commission) released a report containing the increasing investment scams in the country. The report also revealed that Australians had lost over $70 million to fraudulent investment schemes in H1 2021.
The Package of Measures of the FCA
Adding to the plan to reduce investment frauds, the FCA also looks to encourage investors to consider regulated and straightforward financial products over unregulated ones.
Pritchard added to her statement, "The package of measures we revealed today is to ensure that people have the confidence to invest in the financial market. Also, we want to increase our adaptation in the evolving market and be precise about where we will see consumer harm and poor conduct."
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