For anybody looking for investments, the promise of high returns and low risks from an investment platform can be tempting or when the opportunity comes through a seemingly credible referral.
But behind some polished websites and convincing sales pitches lie platforms that are either misinformed or outright fraudulent.
We’ve recently seen a rise in enquiries where investors, particularly expats, have been told after they invest that they must pay a capital gains tax bill before accessing their funds.
Unfortunately, by this stage, the money has already been transferred, and the scammers behind the platform have begun shifting the goalposts.
We’ve written this for a simple reason: after you’ve sent the money, it’s virtually impossible to get it back.
Therefore, whether it’s a scam or a simple misunderstanding, recognising the warning signs before you commit and send a single penny is your best and sometimes only form of defence.
This is especially true for expats and people living abroad who won’t necessarily be able to call upon a regulatory authority, such as the FCA, to come to their aid.
This is a long article and will take around 10-15 minutes to read as we’ve tried to cover everything as this is such an important topic, so we’ve also included a simple summary as well.
Summary of how to spot potential frauds and scams and what you can do to protect yourself
- Verify regulation status: Always confirm if the platform is registered with official regulators like the FCA (UK), SEC or FINRA (US) using official resources, and be cautious of impersonation or unverifiable contact details.
- Common scam red flags: Beware of unsolicited offers, pressure to act quickly, requests to switch communication channels, poor branding or evasive answers, offshore payments, and demands for unexpected taxes before withdrawals.
- Essential questions before investing: Ask about regulation, custody of funds, fees, withdrawal terms, and tax implications especially for expats. Vague or evasive answers should prompt caution and independent advice.
- Caution with online reviews: Reviews can be fake, manipulated, or censored, and testimonials may be fabricated. Even endorsements can be forged or AI-generated, so rely on official regulator checks and independent advisers.
- Funds recovery is difficult: Once money is transferred, especially through offshore accounts or cryptocurrency, it is usually impossible to recover, making prevention the best defence.
- Protect account security: Use unique passwords and avoid reusing login credentials across platforms to reduce exposure to breaches, regardless of platform legitimacy.
- Red flags of delayed tax demands: Requests for capital gains tax or fees before releasing investments are suspicious; legitimate platforms do not collect such taxes upfront and cannot provide official tax references for these payments.
- Why expats are targeted: Expats are often visible, perceived as financially secure, less familiar with local regulations, and may trust FCA claims without verification, making them prime targets for scammers exploiting emotional restraint and social trust.
If you're concerned or would like to speak to someone, please get in touch with us through our introduction services and we'll connect you with someone who will listen and try to help.
The emotional impact of fraud: silence helps the scammers
Being the victim of a financial scam is not just about losing money. It can bring feelings of embarrassment, guilt, and even shame. This is especially true for experienced professionals or financially savvy individuals who feel they should have known and done better.
If you discover you are a victim of fraud, take a moment to calm down and remember that fraudsters are incredibly skilled at creating convincing, polished schemes that mimic genuine platforms with increasing sophistication, all supported by slick looking websites. Even the most experienced and knowledgeable people can be caught out.
If something starts to feel off, even if you're already involved, pause immediately:
- Do not send (any more) money
- Do not provide (any more) personal details
- Do not try to fix it alone
- And most importantly, do not panic or rush any decisions
Instead, speak to someone independent. Do not use contacts, companies or phone numbers provided by the platform.
Any decent adviser will listen without judgement. Their role is to support you, even if it turns out there’s little that can be done. Just talking it through can help you assess your options and stop a bad situation from getting worse.
Remember: fraudsters rely on silence and hesitation to continue. But the moment you acknowledge something’s wrong and seek help, you start to take back control.
The good news is that it is possible to spot the signs before committing, even with the most advanced scams, if you know what to look for.
The next few sections will look at some tell-tale signs, questions to ask and what to do next.
Basic check: is the platform really regulated?
Be aware that scammers often impersonate real firms, so even if they appear on the regulators’ website, it is vital you double-check the details and if you can’t confirm, treat with caution.
Never rely solely on email, WhatsApp, or a slick website. Cross-check every detail using official regulatory resources.
Most importantly, before transferring any money, try to confirm:
- Are they on the FCA register (UK)?
- Are they registered with the SEC (US) or FINRA (US)?
- Do their contact details match the ones listed on official regulator websites?
- Are the people listed on their website on LinkedIn?
Just because a company is not regulated, does not instantly mean they are a scam (although you should only proceed with extreme caution) however, fraudulently using a regulator is near guarantee that they are a scam.
Be wary of common red flags
Even well-dressed scams often share the same traits:
- Someone calls you with a “too good to be true” offer out of the blue
- Pressure to act fast or “risk losing the opportunity”
- Switches to encrypted messaging or personal email
- Poor spelling, inconsistent branding, or (most importantly) evasive answers
- Being overly friendly and “matey” rather than professional
- Requests for payment to offshore accounts, crypto wallets, or third parties
- Being asked to pay unexpected taxes or fees before withdrawals
Ask these essential questions before investing
Wherever you’re living, ask these key questions and ask for independently verifiable supporting evidence wherever possible:
- Who regulates the platform?
- Where is the money held, does an independent custodian control it and is the person holding the money licensed to do so?
- What are the fees, who earns commission and where do commission payments come from?
- How long is my money tied up for?
- What happens if I want to withdraw early?
- Can I walk away with no obligation if I change my mind before sending funds?
For expats:
- Does this investment make sense for someone with my tax residence?
- Could this create reporting or double taxation issues?
It’s really simple, if the answers are vague or evasive, don’t proceed and seek independent advice.
Are online reviews reliable?
Online reviews might seem like a good way to verify an investment platform, but they’re not always a reliable indicator of legitimacy, especially when it comes to scams targeting expats.
Reviews can be fake or manipulated
Scammers often flood Trustpilot, Google, or niche review sites with positive feedback using fake profiles. They may even create their own "independent" review sites that look professional but are designed to build false credibility. Ultimately, there is a lot of money that can be stolen, so scammers will invest time and money to “prove” their legitimacy.
Real reviews can be hidden
Some fraudulent platforms use aggressive tactics to get negative reviews taken down, or they overwhelm them with fake positives. You might only see glowing testimonials while real victims are silenced or ignored.
Testimonials are easy to fake
Photos, names, and quotes can be fabricated or taken from stock images and social media accounts. A testimonial that feels too polished or emotionally persuasive is often written by the fraudsters themselves.
Scams are designed to look legitimate, even “endorsed”
Fraudsters know how to build a convincing digital presence. This can include verified-looking profiles, media mentions (which are sometimes paid or faked), and even endorsements from impersonated experts.
With the rise of AI and deepfake, not all is always as it seems, even when it looks like someone you know and respect talking. It’s better to do a quick search independently as to whether that person is truly endorsing a platform or product.
What/who to trust instead:
- The FCA register (UK) or FINRA/SEC (US): Check if the firm is authorised to operate
- Professional advice: An independent adviser can verify and review any platforms
- Independent verification: Call the company using details on the regulator’s site, not those provided by the platform via email, phone or website
Once the money’s gone, it’s usually gone
Once funds have been transferred, even the best cybercrime experts, tax barristers or regulators may not be able to get them back.
Fraudsters often use:
- Offshore jurisdictions
- Unregulated payment processors
- Cryptocurrency conversions
While these elements are necessarily evidence of a scam, they make tracing and especially recovering your funds incredibly difficult, especially across international borders.
Organisations like the FCA (UK), Action Fraud (UK), SEC (US), and FINRA (US) can investigate and warn others, but unfortunately, they rarely recover stolen assets.
Prevention is always your best defence.
Limit any damage, don’t reuse passwords or security answers
Whether the investment scheme is genuine or not, always create unique login credentials.
Using the same passwords, memorable answers and email addresses as your online banking, email or other financial accounts can leave you exposed. Even if a platform isn’t malicious, a data breach could lead hackers straight to your more valuable accounts.
If you’ve ever used the same login across multiple services, now is the time to change them.
Delayed red flags: Capital Gains Tax payments to “release funds” and moving goalposts
Many expats have reported being told, often months after investing, that they must pay capital gains tax (CGT), VAT, or a withholding fee before their funds can be released.
This is a red flag.
For example, in the UK, investment platforms do not collect capital gains tax on behalf of HMRC. You pay tax after selling your investment, and only via your self-assessment or HMRC’s real-time reporting service.
If you’re asked to send money to a third party, or to pay a tax to a platform before receiving funds, question it immediately.
Ask:
- What legal authority allows them to collect tax?
- Who receives the money?
- Can they provide an HMRC reference or UK banking details?
You can also ask these questions before making any payments, and their answers may highlight potential red flags.
Ultimately, if they can’t or won’t answer, walk away and seek advice.
Why expats are specifically targeted
Expats, especially British expats, are often seen as ideal targets for financial scams, particularly by fraudsters who operate internationally or impersonate legitimate UK institutions. But why?
We believe that expats are targeted more than most other expats for the following reasons:
Easy to identify and approach
British nationals abroad often maintain visible profiles. They might list their location on social media, include education history on LinkedIn, or join online expat groups. Fraudsters can easily find, research, and contact them—often posing as fellow expats, old university contacts, or financial professionals offering tax or pension help.
Appear to be financially secure
British expats often have:
- Property or pension assets back home
- Lump sums from inheritance or property sales
- Regular income from abroad or from private pensions
Even if not extremely wealthy, they are perceived to be in a strong financial position—and often lack the infrastructure around them to protect those assets properly.
Less familiar with local regulation
Living abroad means you’re no longer directly under UK consumer protection systems. Scammers exploit this grey area—setting up fake platforms that appear UK-regulated, often using cloned branding, FCA numbers, and professional-sounding documentation.
FCA claims can seem reassuring
Scam platforms often claim to be “FCA registered” or “UK regulated” because those terms feel familiar and trustworthy to British expats. But many victims don’t check the FCA Register, or don’t realise how easy it is to clone a legitimate firm.
Cultural tendencies toward emotional restraint
Fraudsters know that many British victims, particularly older generations, can feel embarrassed or ashamed to admit they’ve been misled. This temporary inertia often gives scammers time to either extract even more money or disappear before the victim seeks help.
Don’t let the expat lifestyle cloud your judgement
When you’re abroad:
- You may have fewer trusted contacts
- You may feel urgency to secure your financial future
- You may feel reassured by other expats who are already in
But that trust can be misplaced. Expat communities are a prime target for fraudsters, who know how to gain confidence through social circles and shared backgrounds.
Key points to remember when making any investment decisions
A legitimate investment platform will:
- Never pressure you into making a quick decision
- Support your decision to get independent advice
- Always be clear about regulation, risks, and fees
- Let you verify credentials using official sources
- Never ask you to prepay tax before releasing funds
If anything feels off or evasive, even slightly, don’t send money, and don’t stay silent.
Ask questions. Get independent advice.
And remember, the longer you wait, the fewer options you may have.
Useful resources
UK
US
Global
If you’re reading this, you’ve probably encountered a red flag
Whether you’re feeling uncertain or being asked to send more money to unlock your investment we may be able to provide some kind of reassurance.
Use our free introduction service to speak to an independent adviser with experience supporting expatriates facing international investment risks.
