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Diamond con cost £150k: how to avoid scams

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Written by: Paloma Kubiak
01/07/2016
Investments in fake diamonds, bogus stocks and shares and fine wines that don’t exist cost scam victims an average of £20,000, and in some cases far more.

Analysis of 5,000 scams reported to charity Citizens Advice between January and March 2016 revealed just how fraudsters con savers and investors out of thousands of pounds.

While the average amount lost across all types of scam such as vishing and pension liberation averaged £2,500, those falling victim to less common investment scams lost much more.

In cases seen by Citizens Advice, people were cold-called with opportunities to invest in diamonds and gold, which either didn’t exist or were not actually the product they’d been offered.

One man paid £150,000 for diamonds which, although genuine, turned out to be worth a fraction of the cost.

People were persuaded to buy vintage and fine wines with promises that their value would increase over time. One person invested £500 after being offered a steep increase and cash back from the trader. The money didn’t arrive, and when they tried to cancel they were unable to contact the trader.

When it comes to stocks and shares, bonds and ISAs, people were contacted by scammers offering to trade on their behalf or to sell their current investments at inflated prices, which can cost people £13,500 on average.

One individual invested £65,000 with a share trader who offered them 3% dividends every month. They contacted Citizens Advice after the trader made excuses not to give the money back.

Pensions continue to be an area targeted, with people contacted out of the blue with offers of free “advice” on how to increase their investment.

Previous research from the charity revealed that as many as 10.9 million people received unsolicited contact about their pension in the last year, with scammers offering free advice as a step towards tricking them out of their pension.

Today Citizens Advice and the Chartered Trading Standards Institute have launched Scams Awareness Month – a campaign to help people avoid falling prey to scams.

Scams devastate people’s finances

Gillian Guy, chief executive of Citizens Advice, said: “Scams can devastate people’s finances and leave them empty handed.

“Fraudsters vary their tactics to target different people, from pushing cut-price offers to those on a budget, to high-interest investments for those looking to grow their savings. We’re warning people to be on their guard against opportunities that come out of the blue and far exceed the deals you’d get elsewhere – they may well be a scam.

“If you think you’ve lost money to a scam, seek advice as soon as possible so you have the best chance of getting your money back. It’s vital that people who have fallen prey to fraudsters alert others to stop the scam from spreading, and report it to the authorities so we can stop con-artists from getting away with it.”

If you suspect a scam, call its consumer service on 03454 04 05 06 which can provide advice and can pass details on to Trading Standards.

You can also report scams or suspected scams to Action Fraud on 0300 123 2040.

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