How vulnerable people lost their savings as regulators stood on the sidelines Business News


n one devastating moment, Jane Caldwell realized she had lost £ 200,000. Part of the money came from a life insurance payment she had not touched since the death of her partner a decade earlier. She had put it aside for the future of their disabled daughter.

“As an older mother and her father having passed away, I thought my daughter was probably going to need my help in the future, which I won’t be here to do,” said Caldwell, who asked for her name. be changed. it would not be the target of fraudsters.

In mid-2018, Caldwell, who is unable to work for health reasons, received a call from a man she believed to be from Nationwide, with whom she had savings bonds. It wasn’t from Nationwide at all – but the caller seemed to know all about his finances.

Caldwell was on the verge of becoming one of the many victims of investment scams who find little help from regulators, banks or the police when they lose life-changing amounts of money.

The Financial Conduct Authority (FCA) was aware of the scam six months before the call, but failed to stop sellers from prosecuting vulnerable people for nearly two years, an investigation by The independent found.

Reports of investment fraud to the police more than tripled between 2017 and 2020 and are on track to hit an all-time high this year. Victims have reported nearly 7,000 cases and £ 177million in losses in the first three months of the year alone, new figures from the National Fraud Intelligence Bureau show.

Since 2017, the total losses reported to investment fraudsters have exceeded £ 2 billion. The actual figure is almost certainly higher, as many victims do not call the police.

“I am dyslexic. I have a hard time remembering things, ”Caldwell says. But she remembers the sales call vividly.

“He gave advice on my links and said a change would be the best thing for my daughter.”

He was persistent, recommending that she invest her savings in a real estate company called Exmount Construction Limited, Caldwell says.

After much persuasion, she walked into her Nationwide branch, approached the counter and, with the help of a cashier, transferred nearly £ 200,000.

She says she didn’t know she was putting her savings in a high-risk investment and that the construction company should have wondered about such a large transfer. Nationwide says it has complied with its legal obligations. Several months later, when her current partner questioned the transfer, Caldwell realized she had been scammed.

Exmount has since disappeared, its phone lines are dead and there is no evidence that any money was ever invested in the property.

Long line of victims

The case comes on top of a string of issues that arose under the watchful eye of former FCA boss Andrew Bailey. Last year a damning report was released on the failures before the £ 237million collapse of another investment firm, London Capital & Finance.

It also has echoes of Blackmore Bond, which entered administration last year with £ 47million in cash from savers. The FCA did not follow up on repeated warnings, addressed directly to Bailey, that it was a scam.

After Caldwell complained, the Financial Ombudsman Service asked Nationwide to refund his money, but the construction company appealed the decision. “As no mistakes were made by the company, we are not responsible for its loss,” a spokesperson said.

Exmount said it offers returns of 12.5%. Vendors were targeting vulnerable people for at least 18 months after FCA was alerted about the company, documents show.


Nationwide also dismissed a complaint from a 79-year-old Exmount victim with dementia who transferred £ 50,000. The construction company then reimbursed this victim’s money after being told to do so by the ombudsman.

A group of 15 other victims, including many elderly and vulnerable people, have come together to recover the £ 1million they invested in Exmount. All parted with their money after the FCA was warned. None wished to be named for fear of being further targeted by crooks. The total number of victims is unknown.

Glossy brochures, a top lawyer … and a gardener for a director

The Exmount case demonstrates the ease with which companies selling questionable investments can operate under the noses of regulators.

The brochure and the Exmount website have been signed by an individual approved by the FCA; its legal documents had the seal of approval of a senior lawyer, while an established accounting firm acted as a trustee.

A glossy brochure portrayed Exmount as a visionary real estate company, but beneath the astute marketing were warning signs for those who knew where to look.

The company started life in 2013, registered in a non-descript semi-detached house in North London. The address, 2 Woodberry Grove, has become known as the home – on paper – to more than 20,000 standard businesses.

All were originally registered in the name of an 86-year-old woman and some were used to commit scams.

After four years of inactivity, Exmount was taken over by Joe Thomas Mason, 38, …

More about this article: Read More
This notice was published: 2021-05-17 16:20:07