Wine Fraud: A Growing Concern

But the fact that the business is not regulated by the Financial Conduct Authority (FCA) means investment is hugely open to exploitation.

The Method

Wine scams often begin with a cold call. It’s worth remembering that unsolicited telephone selling is actually illegal in the UK under the Data Protection Act, unless you have given the seller prior permission to call. A good rule is to never give any personal details over the phone – the potential risks are simply too great, and if you happen to be keen on investing in wine, there is nothing to stop you doing your own research and contacting a genuine wine merchant on your own terms.

It’s also worth remembering that reputable wine merchants won’t resort to cold calling, will already be established and have a long-standing reputation. The majority of wine scam companies are ‘new to the trade’, and with returns in the business sometimes taking years to come to fruition, it is incredibly risky to put your trust in a company with no proven track record.

Other people have invested in fraudulent wine companies due to the advice of independent financial advisors (IFAs). This may have been during a regular meeting or pension review. With regulations in place to ensure suitable advice that is of benefit to clients, any IFAs who have willingly given bad advice could be liable for prosecution.

Types of Wine Scam

Wine fraud is not easy to summarise in a sentence, and as one particular example gets more and more well-known, fraudsters will find another avenue to pursue. Some will charge over-the-odds for wine, ultimately ensuring a short term gain for themselves and a long term loss for your investment.

In other cases, customers have invested sums of money without return. Unable to sell their wine, they’ve even been unable to access the wine itself, either due to import laws, storage problems or the wine simply not existing in the first place.

A recent development has seen several rogue companies adopting the name of an established merchant, scamming individuals into giving away large sums of money and leaving a reputable, genuine merchant to take the blame. Investing in wine can quickly go from seeming like a simple way of making your money work harder, to a financial black hole.

Expert view

“Our advice in terms of investment scams is always that if it seems too good to be true, it probably is. There some wine investments that are legitimate but if you are approached via a text, spam email or high pressure sales call, our advice is to stay well clear.

If your financial adviser suggested this sort of investment and it wasn’t suitable, you may well be able to make a claim to recover some of the money you lost.”

Peter McKenna, Partner

If you believe you have been the victim of a wine scam, TLWs financial mis-selling team may be able to get your money back.

This applies even if the firm who advised you has now gone out of business. Our solicitors are here to help on a no-win no-fee basis.

Fill in our enquiry form, email us at info@tlwsolicitors.co.uk or call us free on 0800 169 5925.