Scammers target investors claiming to recover lost funds

Investors are being warned about worrying scams by people falsely claiming they can recover lost investments claiming that they are working on behalf of the Insolvency Service

The Insolvency Service is aware that scammers have been contacting investors claiming to be working on behalf of the Official Receiver or the Insolvency Service, with the false promise of recovering lost funds for an up-front fee.

These approaches are always fraudulent. They are known as recovery room schemes, where someone impersonates a legitimate UK corporate entity and claim that they are representing the Insolvency Service/Official Receiver.

To legitimise their contact, recovery room scammers will send fake letters with the Insolvency Service logo, say they are calling on behalf of the Insolvency Service, impersonate a legitimate employee of the Insolvency Service, and also refer investors to social media accounts of Insolvency Service employees.

Another tactic used by scammers is ‘spoofing’ where the caller ID and telephone number seen by an investor is not the scammer’s details but are legitimate phone numbers used by the Insolvency Service or other organisations.

Official Receivers or any agent legitimately instructed to act on their behalf will never ask you to pay an up-front fee to get some or all of your investment back.

The Official Receiver can only make a return to you as a creditor in failed schemes if assets are realised in the liquidation of the company you bought your investment from. If there is a distribution to be made, the Official Receiver will write to creditors letting them know and inviting them to submit a proof of debt.

Investors are being warned that paying an up-front fee will not make them a priority creditor – you won’t get paid faster or increase the chance of you getting any money back. If you are asked to pay an up-front fee to get your money back by an organisation purporting to be the Insolvency Service or acting on behalf of the Insolvency Service, someone is more than likely attempting to scam you.

Advice if you receive unsolicited approaches

The Insolvency Service will always look to co-operate with other government agencies and prosecuting authorities when we are made aware of recovery room scammers. You should report all fraudulent contact from individuals stating they can get your lost investments back for a fee. You can also report these approaches to Action Fraud.

Where we become aware of recovery room schemes, we will look to warn investors. The Financial Conduct Authority (FCA) also publishes a list of known fraudulent claims management companies, you can check online if a warning has been posted about the company that approaches you. Just because the company that has contacted you is not on this list does not mean that they are not attempting to scam you.

You can avoid many unsolicited telephone calls by registering your phone number with the Telephone Preference Service (TPS). The TPS is the official central opt-out register for people who do not want to receive unsolicited sales and marketing calls and is a free service.

Sara White |Editor, Accountancy Daily, published by Croner-i

Sara White is editor of Accountancy Daily, published by Croner-i, and in...

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