Investment scams have become one of the most significant threats facing retail investors in Europe. The rapid digitalisation of financial services, together with the global and cross-border nature of online platforms, has enabled fraudsters to scale their activities, exploit regulatory gaps, and target investors across all demographics. These scams undermine trust in financial markets and weaken household financial resilience.
Recent evidence indicates that scams are systemic rather than marginal. Over €20 billion is lost to scams globally, while 56% of Europeans report encountering fraud attempts and 39% experiencing monetary fraud. Investment scams are particularly harmful because they produce the highest average losses per victim, often involving deceptive offers through fake trading platforms, crypto schemes, impersonation of legitimate financial firms, and social media-driven promotion.
BETTER FINANCE’s examination highlights how modern scams increasingly operate through hybrid and digitally amplified channels. BigTech platforms, advertising networks, and “finfluencers” have become major entry points through which scammers reach retail investors.
A key challenge in tackling investment scams is the fragmented regulatory and data landscape across the EU. Limited data sharing, inconsistent reporting by national authorities, and gaps between financial, digital, and consumer protection frameworks hinder effective enforcement. At the same time, payment systems and instant transfers allow fraudulent transactions to be executed quickly, often before preventative measures can intervene.
While several EU policy initiatives address elements of the problem, including MiCA, the Digital Services Act (DSA), and revisions to the Payments Services framework (PSD3/PSR), the report notes that these measures remain incomplete. Fraud prevention is still fragmented, liability across actors remains unclear, and warning systems are not fully integrated into digital platforms.
To address this challenge, BETTER FINANCE proposes a comprehensive policy approach built on three pillars: Prevent, Protect, and Repair:
- Prevention should include mandatory screening of financial advertisements, integration of regulatory warning lists into search engines and social platforms, stronger oversight of finfluencers, and improved investor awareness.
- Protection requires enhanced cooperation between regulators, financial institutions, and platforms, as well as shared EU databases of fraudulent accounts and domains.
- Repair mechanisms should ensure fair reimbursement for victims and clearer liability for platforms or payment service providers that fail to prevent foreseeable harm.
Conclusively, combating investment scams requires shared responsibility across the financial ecosystem, including regulators, payment providers, digital platforms, and financial institutions. A coherent EU framework that prioritises prevention, ensures effective protection, and guarantees compensation for victims is essential to restore trust in capital markets and safeguard retail investors.
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