In order to convince clients that they are offering the “Real Deal” companies often choose names which imply they may be regulated and authorised to give advice. However, no regulated firm would cold call you or knock at your door.
Check with the FCA
Companies choose names such as “PFR Services (planning for retirement), xxx Wealth Management, xxx Capital, xxx Advisory Service, xxx Investment or xxx Finance to get their foot through your door.
Always check the FCA register before signing up or parting with your money and make sure you report scammers!
One of our clients is a nurse close to retirement age. She had to reduce her hours after her mother passed away and she started working part-time in a café in order to be able to look after her father, who was in his late eighties.
They were approached out of the blue by a door-to-door salesman from Grosvenor Park Intelligent Investments. The company offered SIPP investments in bamboo, warehouse storage pods and luxury Caribbean resorts, amongst other opportunities. Her dad was convinced by the lovely man to invest his savings in High Grove Osprey bonds.
Unfortunately, his money is now lost with no way to recover it, as Grosvenor Park Intelligent Investments was neither authorised nor regulated to give pension or investment advice. The company has a winding up petition filed against it, but this could drag on for years, with no money left to distribute to the creditors.
In the meantime, Grosvenor set up a close relationship with Anthony Frost (Tony Frost) from Choices – Your Mortgage Solutions. Tony not only arranged for the client’s NHS pension to be transferred out to invest into bamboo, he also managed to convince her to invest into Harlequin Property and InvestUS – a “so called” US Government backed investment scheme. Needless to say, her NHS pension scheme was one of the best you could be a member of, with special guarantees which could not be replaced.
Tony Frost even managed to set up 2 SIPPs, as the first SIPP provider would no longer accept these kinds of investments – collecting 3 sets of commissions and fees. Commission for each investment and a fee for establishing each SIPP.
Tony was a really nice chap. He always stayed in touch about her investments while trying to help recuperate losses of her father’s money. He also maintained a close relationship with the investment companies – in order to keep both of his clients updated.
After it became apparent that Harlequin Property was in trouble, Harlequin’s owners offered clients the option of moving their deposits from the failed resorts to completed cabanas, offering them a glimpse of hope that not all their money would be lost. However clients were asked to put more money on the table in order to receive 100% ownership of the completed properties.
Closely monitoring what was happening, Tony was the first to knock at her door to explain that she may have a claim for compensation.
He offered his help with the claim trying to convince her at the same time that she could raise money this way to complete her Harlequin Property purchase.
Ask for Help Early
That’s when she came to ACL – wanting to understand her options. She was very worried and didn’t know who she could trust.
We unravelled all the transactions and submitted two complaints to two different companies. Choices – Your Mortgage Solutions had closed its doors to new business and has been declared in default. The second case was upheld by the Financial Ombudsman Services.
If you’ve had dealings with these sort of companies you may realise from our blog that there are clear patterns of the sales people trying to stay in touch with the victims. The reason may not be obvious to you, but if customers should fail to raise a complaint within 6 years from point of sale they may lose out on compensation and the agents get away without having to set things right. So the longer they can stall you, the better for them.
Whilst we managed to recover some of her losses, the whole transaction has left her with failed investments and two sets of SIPP provider fees and charges. Unfortunately she can’t consolidate these investment into one SIPP, as no provider currently accepts transfers of any kind of high risk and unregulated investments.
Be careful who you trust and ask for help as soon as you become concerned.