£28m Investment Scam Targets Elderly

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The Insolvency Service is warning older people and their carers to watch out for bogus retail and investment schemes aimed at them, as figures show 78 rogue companies that raked in over £28million from the public have been shut down in England and Wales in the last three years alone.

Between them, the companies, which represent around one in ten of over 800 companies wound up by The Insolvency Service in the three years between April 2009 and March 2012, scammed close to 2,000 investors. Information obtained by The Insolvency Service has shown that the oldest person was 92.

Forty-nine of the companies sold plots of land for ‘building’ that either didn’t exist or were on protected green belt land; four sold wine stocks that did not yield any profits, and nineteen sold other forms of investment. Six sold retail products that were either unsuitable or at highly inflated prices, including burglar alarms, mobility scooters, ‘heritage’ coins and stair-lifts.

The Insolvency Service is being supported by three charities Age UK, Alzheimer’s Society and Action on Elder Abuse, to warn the public about these scams, on the same day that campaign actions to highlight World Elder Abuse Awareness Day are taking place.

The warning, also aimed at friends and families of older people, stresses that such scams typically employ the telephone equivalent of ‘door-stepping’. They phone older people and often refuse to come off the phone until they have closed a sale.

The retail scams often involve pressurised selling of an unwanted product to an older person, or a product at a grossly inflated price, carried out during a home visit or through doorstep selling.

Business Minister Norman Lamb said:

“These scams are especially bad as they target some of the most vulnerable members in our society. Older people have grown up trusting other people. To take advantage of this trust, and then exploit it is both manipulative and deceitful.”

“I support the work Insolvency Service and its partners are doing to warn older people, and would urge people to be vigilant when approached to make investments out of the blue.”

Robert Burns, Head of Investigation and Enforcement for The Insolvency Service said:

“We have observed a number of companies targeting older people in recent months. These scams are particularly unpleasant because they target the most susceptible members of society, older people who may be unsure how to seek advice or afraid to say “no”. They can destroy lives at a time when those targeted should be taking a break from worry and enjoying life after working hard.”

“Victims are paying for something and getting nothing. The worst aspect is the callousness with which the fraudsters go about their business; ignoring the obvious fact that that because of their age, most victims will never be able to make good their loss.”

“Not one of the landbanking companies we have investigated and wound up has seen a profit for the investor. If you are cold-called, don’t be afraid to say ‘no thank you’. If in doubt, you should take time to research the company and get some independent advice.”

“Today is World Elder Abuse Awareness Day and we would urge all friends, carers and family members to be vigilant and look out for the older members of their family to ensure that they are not scammed by rogue businessmen.”

Michelle Mitchell, Charity Director General at Age UK, said:

“Scammers will often see vulnerable older people as an easy target. Scams can take place on the doorstep; by phone, on the internet or through the post and the sad fact is that if something sounds too good to be true then it probably is. If you feel under pressure to commit, then just step away because any reputable company will allow you time to think an offer over.”

“Anyone can be taken in by a scam so people shouldn’t be embarrassed to report a crime. If you feel you are or have been a victim speak to the police, a family member or friend.”

“Age UK have produced two free information guides ‘Avoiding Scams’ and ‘Staying Safe’ which provide practical steps to ensure older people are able to protect themselves against this type of crime in their home and on their doorstep.”

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