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All That Glitters Is Not Gold

South Gloucestershire Trading Standards - 11th October 2013

South Gloucestershire Trading Standards is concerned by recent evidence suggesting that organised fraudsters may be targeting residents with the promise of lucrative investments in gold, diamonds and expensive wines.

This apparently reflects a trend being experienced by numerous other Trading Standards Departments in the UK, whereby individuals are cold called by telephone by businesses having prior knowledge that their victim has previously invested in wines or precious stones for example.

In some cases the caller will try to interest the victim in an “asset exchange”, which essentially involves them in transferring their high end wine collection or a precious stone to the business in return for an equivalent value asset. In other cases the business will just offer straight investment opportunities in commodities which may never materialise or the business ceases trading soon afterwards.

Normally the business will want to conduct proceedings at a distance so that there is never any face to face contact and they use addresses which appear to be based in central London. They complement this with some very persuasive text on their website, which may give the impression that they have been involved in high end investments for many years.

It is strongly suspected that such businesses may have bought customer lists from other investment businesses which have since ceased to trade, hence they know exactly who to target. They may offer a very generous price for the customers asset, which could be well above market valuation and it is suspected that if any asset is transferred in exchange it will be of a much lower value than the customer has been led to expect.

South Gloucestershire Trading Standards is aware of a recent case of an asset exchange where the customer agreed to transfer several cases of expensive wine, with a value of nearly £100,000, in return for a similarly valued diamond. When the diamond was provided it was professionally valued at just a few thousand pounds.

Investors in particular are urged not to be blinded by the thought of a high valuation being offered on the asset they are being asked to transfer and that it is vital to research any business operating in this market. Always deal with well established businesses whose staff can be dealt with face to face at their business premises. Cold callers offering such opportunities should be treated with strong suspicion.

The old adage still stands true – if a deal seems too good to be true it probably is and it is not unknown for fraudsters to be using virtual offices in central London, thus making them very difficult to trace in the event of a complaint.

Any residents who need advice on dealing with an approach from businesses offering these types of investment opportunities are urged to call Neil Derrick on 01454 864565.