Manchester (PRWEB) April 27, 2012
All the scams they examined had one overriding objective – to relieve property investors of their hard earned cash.
The OFT believes that some £1 billion a year is lost through stings involving telemarketing, non-existent prize draws, pyramid schemes, credit scams and ‘get rich quick’ property swindles. Many of these scams have their origin overseas, so the chance of victims getting their money back is too remote to quantify and in most cases it has proved impossible to detect the abusers or to prosecute them.
Typically, property scams involve would-be investors attending presentations – often with the lure of free goodies – and they are then subjected to a hard-sell patter, sometimes lasting several hours, before being relieved of thousands of pounds. Some scams pledge the release of ‘insider secrets’ via a training course to achieve wealth through property dealing; others draw their victims in with an opportunity to buy properties at a discount, often before they are built (and of course, they are all too often NEVER built).
One of the more common schemes involves the promise of full supervision and management for buy-to-let investment. It is not unusual for the swindle to include claims of high yields, professional tenants, free mortgage arrangements and total administration of the project. In practice, the properties sourced are usually near derelict and tenants non-existent.
A representative at the OFT commented: ‘Scammers are resourceful, enterprising and manipulative. By exploiting the same routes to market as legitimate business, they damage not only individual consumers, but the interests of fair trading businesses as well.’
The OFT put the following advice out to consumers:
· If in doubt about a caller – hang up.
· Never send money to receive a prize.
· Never give out private financial information.
· Be extremely cautious about unsolicited investments.
· Sign nothing - agree to nothing - and always get the opinion of an independent financial adviser before handing over or agreeing to hand over any money.
· If it sounds too good to be true – it probably is!
Fraudsters are increasingly using the Internet as a vehicle to ensnare their victims. Investors should ensure their access to the Internet is fully protected. Personal computers should have adequate firewall security installed and – as difficult as it may be – no personal financial data (bank account numbers, credit card details, etc) should be stored on your PC. Experienced scammers can gain access to this information without you knowing about it - until it is too late.
Do not reply to unsolicited emails no matter how tempting they may be – by doing so you could unwittingly supply a potential scammer with your personal details. Instead, simply block it and delete it!
The government funded information scheme, ‘Consumer Direct’, is run by the DTI and offers clear and concise advice for those presented with a property investment scheme that seems too good to be true. It asks you to STOP and THINK … and then ask yourself these questions:
· Was the promotion unsolicited?
· Does it look too good to be true?
· Do I have to respond ‘at once’ – what’s the rush?
· Do I have to give my bank or credit card details?
· Am I asked to keep the offer/promotion confidential?
· Can I afford to lose the money being asked for?
Consumer Direct suggest taking legal or professional advice before parting with any money, because once it has been sent the chances are it will never be seen again. They also provide the following guide, which should help prevent consumers becoming the latest victims of property investment scams:
· Ask for the name of the person speaking to and whom they represent.
· Take notes of conversations, including dates, times, names and important points.
· Ask for an explanation of anything not understood.
· Read letters carefully and seek professional help (for example, from an accountant or solicitor) when significant money, time or responsibilities are involved.
· Check whether a company is bona fide, contact Companies House or the Financial Services Authority.
· Independently verify any claims made by a sales person, investment advisor or advertisement.
· Make sure that any company complies with the applicable legislation (in the UK, all companies must be registered with Companies House).
· Only do business with companies known and trusted.
· Make sure all the terms and conditions of any offer made are fully understood.
· Take time before making any decision.
· Don't provide ANY financial or other financial or other personal information before establishing whether a company is legitimate.
· Understand and monitor all investments and ask frequent questions and map out financial goals before you meet with a financial planner.
· Don’t judge the credibility of a company or sales person by how ‘professional’ they or their promotional material or website might seem.
· Don’t fall for high-pressure sales tactics.
· Don’t let embarrassment or fear prevent the reporting of fraud or abuse to the appropriate authorities.
· Don’t ever be afraid to ask questions. In fact, the more questions asked, the better.
· If you ever think you are being targeted by a scam operator or want further advice, call Consumer Direct on 08454 040506.
Remote buy-to-let investment plans can appear very attractive. They succeed by convincing investors that they know the area better than anyone, they know property values better than anyone and they have more knowledge and experience than anyone. But they may have none of these qualities – just the gift of talking fast and convincingly!
When considering investing in property through an ‘investment agent’ claiming to operate some distance away, make the effort to travel to the proposed region – check out the offices of the company, view the property in question, arrange a survey, check documentation with a solicitor and get answers to all questions.
My Golden Rule for anyone thinking of investing in property: Never accept any advice or information supplied at face value. Deal only with people who can be trusted – and an agency office that has a solid door, so you can walk through it to ask pertinent questions and receive proper answers.
Scams targeting property investors are becoming more prevalent and although schemes presented can appear alluring and plausible, very few ever achieve their promises.
Think carefully before parting with ANY money and investigate the company concerned thoroughly. Don’t get caught out!
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