October 10th 2016
Figures released today by Action Fraud and the City of London Police show that over 77% of all victims reporting investment fraud are men with the average age of 65. Their average loss is over £32,000, with most victims living in metropolitan areas.
In 2014 the City of London Police, City of London Corporation Trading Standards, Metropolitan Police, National Trading Standards ‘Scambusters’ Team, HMRC and the FCA, launched Operation Broadway, a London-wide intelligence-led drive to uncover and disrupt suspected ‘boiler room’ investment frauds operating out of some of the capital’s most iconic buildings in the heart of the UK's main financial districts.
Operation Broadway teams have conducted inspections and disruption raids at over 100 offices in the City and Canary Wharf since its launch. Police and trading standards chiefs believe this has created a hostile environment for fraudsters.
Just last Thursday (October 6th) the Money Laundering Investigation Unit disrupted a suspected boiler room in the City of London, selling fake bonds. Two search warrants were executed: one in Fleet, Hampshire, and other in Lothbury, City of London. Two cheques totalling £130,000 were seized, together with other documentary items, as part of the operationo
However, despite this type of work, UK-wide investment fraud reports to Action Fraud increased by 9.5% last year – from 2,910 in the financial year 2014/15 to 3,186 in 2015/16 – indicating criminals are operating boiler rooms in new locations in the UK.
Over the next week, the City of London Police, City of London Trading Standards and their Operation Broadway partners will be raising awareness of investment fraud and providing advice to help people protect themselves and their family. To do this, theywill be sharing a number of victim testimonies on their social media channels. You can view these here. The videos, which will be released throughout the week, show the impact that this type of fraud has on victims. There have historically been examples of victims committing suicide after this type of fraud has been committed against them, which makes it clear that there is far more than just a financial impact.
The City of London Corporation is creating a specialist trading standards officer post under the Operation Broadway remit, which will focus on rolling the City’s model out across Greater London. The specialist officer will work with trading standards teams across London’s local authorities to ensure mail forwarding companies and serviced office providers are not allowing boiler rooms to operate on their patch. It is also hoped that this work will produce useful intelligence that will make it even harder for investment fraudsters to operate.
The City of London Corporation’s Trading Standards, with help from the City of London Police, last year prosecuted Servcorp UK Limited and Regus Management UK Ltd -two serviced office providers – which were allowing suspected boiler room fraud to operate on their watch, under the London Local Authorities Act.
Over the rest of 2016/17, officers from the City of London Police and City of London Corporation Trading Standards will also be reaching out to community groups, offering training to help senior citizens avoid becoming victims of investment fraud. They will also be offering aides memoire so that potential victims are reminded what they need to do if they receive a cold call.
Detective Chief Inspector Dave Manley, Head of the City of London Police’s Fraud Squad and Operation Broadway lead, said: “Investment fraud continues to be a major threat to individuals in this country and statistics show that those who are over 60 are particularly vulnerable to this type of crime. Fraudsters will do everything they can to manipulate potential victims and convince them that they are making genuine investments. Unfortunately, once a victim is sucked in by a fraudster, they often end-up parting with a significant amount of money and this can have devastating effects on both the individual and their families."
DCI Manley continued: “The City of London Police is the national policing lead for fraud and it is our job to work with police forces across the country as well as with our partners to ensure that criminals such as investment fraudsters are disrupted and ultimately prevented from committing crime. By raising awareness of investment fraud we hope to enable people to recognise when they are being targeted by the criminals and to stop them before it is too late”.
Jon Averns, City of London Corporation’s Head of Trading Standards, said: “Working with our partners across London, we are creating a hostile environment for fraudsters who are duping people with the promise of high returns on false investments. We are identifying fraudulent traders as early as possible in order to prevent consumers from across the UK being ripped off. Our message is simple: don’t send your money to someone you don’t know, for a product you haven’t seen.”
Jennie Granger, HMRC’s Director General, Customer Compliance Group, said: “In 2014/15 HMRC prevented the loss of £1.3 billion in the most serious cases relating to organised crime. Our work with the City of London Police and partners helps HMRC in its role as an Anti-Money Laundering supervisor to prevent fraudulent activity, protect the public, and bring criminals to justice.”