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Investors warned about equity release scam

Submitted by Manager on Wed, 30/11/2011 - 11:13

The National Fraud Intelligence Bureau is warning of a new investment scam which is hitting elderly and vulnerable victims.

The offenders advise them to use an equity release programme to release funds – as homes are often the largest asset their victims own. They then offer to buy or sell shares, stocks, land or other property, or rare goods.

They use publically available shareholder lists to target their victims, make contact with  them at seminars and events, or even use word of mouth.

Current commodity-based investments favoured by fraudsters include carbon credits, wine, precious metals and gems. Often the offenders claim they have insider information, a hot tip or special expertise. How to spot an investment fraud

  1. Independent Advice. Check any investment you are considering with an IFA. Alarm bells should ring if your contact tries to prevent you from doing this, for example with a non-disclosure agreement.
  2. Sales tactics. An authorised firm would be unlikely to contact a prospective customer out of the blue with an investment opportunity – and they certainly wouldn’t use harassment, persistent phone calls or high-pressure sales tactics.
  3. Openers and closers. If your caller hands you to a more senior person to close the deal and arrange payment, do not go through with the deal.
  4.  Authorisation. If the firm you’re dealing with is not on the Financial Services Authority Register, avoid them – even if they tell you registration is pending, or not required.
  5. Overseas firms. If you give your money to an overseas business not authorised by the FSA, you will have no recourse to the Financial Ombudsman or Financial Services Compensation Scheme
  6. Corporate impersonation. Always verify the contact details you are given by checking them against independently sourced details – fraudsters sometimes impersonate established companies.
  7. Repeat targeting. If you have been stung once, be on guard for follow-up offers, fees, taxes or even further investment.

If you suspect you have been targeted

  • Seek independent advice from an IFA – call My IFM any time to check over any investments you’re considering on 0845 066 9432
  • Call the FSA helpline on 0845 606 1234
  • Visit the FSA’s website
  • Alternatively, visit Action Fraud's website or call them on 0300 123 2040

 

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