Leeds fraud victim lost £36,000 to crooks behind 'daylight robbery' bonds scam

When 'David' saw an advert in a national newspaper promoting bonds with a guaranteed six per cent return, the prospect that it might be a scam was the furthest thing from his mind.

But the decision to leave his details with the answering service detailed in that ad put him in the sights of fraudsters going to elaborate lengths to trick people into willingly handing over significant sums.

They spent several weeks chatting to him over the phone and exchanging emails from the fake company's accounts, winning his trust and persuading him it was the right investment.

Almost a year on, David has been told there is no hope of getting back the money that he had planned to leave to his grandchildren one day.

"You can’t trust anybody," he said. "Even the banks say your investment can go down as well as up - but this was daylight robbery really.

"It’s not really any different to somebody breaking in and pinching the cash."

As the YEP launches its Stop The Scammers campaign, David is sharing his story in the hope that it might save others from being targeted in the same way.

Now retired and in his 70s, David and his wife had been looking at how best to invest the proceeds from the recent sale of a house.

"It all began last February or March," he said. "I came into quite a nice sum of money when I sold some property. We had done it up ourselves and got some rent for it.

"When I sold the property, I thought I would put the money somewhere safe."

He had invested most of the money into schemes recommended by financial advisers at his own bank, but there was still around £50,000 available to invest or spend.

While reading a newspaper's television supplement one day, he spotted what appeared to be a genuine advert for the London-based investment firm Wellesley and Co.

David said: "They were offering a six per cent return on £40,000. It said if you’re interested, leave your number and we’ll ring you back.

"My son-in-law works in finance and had heard of Wellesley. It was the last thing on my mind that it was a scam with us getting in touch with the number that was in the advert."

A short time later, he got the first of many calls to come from one of the fraudsters who began to sell him on the benefits on the fake bonds scheme advertised. They promised not only a six per cent return but also said his account would be credited with an extra £3,000 upon investing.

"They’re very professional," David said. "It gets to first names - how are you? How was your weekend?"

After three or four weeks of regular contact from various representatives, they had won David's confidence enough that he was willing to invest £36,000.

Paperwork was sent through to him in April confirming the investment, including a certificate setting out the details of the bonds.

But the first signs that something might not be right came within a week or two when the couple received a letter to their Horsforth home from Wellesley and Co. It warned that the company had recently become aware that another website was masquerading as its own.

The letter said the company had reported suspected fraudulent activity to the relevant authorities and gave details of how to contact Action Fraud and the Financial Conduct Authority (FCA).

But when David called the number on the business card enclosed, he said he was told the letter had been issued in error by a new staff member.

“They said it had been sent out by mistake so I accepted that,” he said.

Believing there was nothing to worry about, he did not investigate further or make enquiries of his own with the authorities.

To this day, he is still not sure whether the person he called was a member of the legitimate firm or the scam operation using its identity.

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In the meantime, the fraudsters were coming back on a regular basis with emails promoting new investment opportunities.

“He wanted me to purchase another £150,000,” David said. “I said that’s all invested with HSBC. It never crossed my mind that it was fraudulent though.”

In June, the FCA added Wellesley Property Group and Wellesley Group Limited to its warning list.

It said fraudsters had cloned Wellesley and Co Limited, an existing firm authorised by the FCA, and were using those two similar company names to pass themselves off as the real thing.

In its warning, the FCA provided the fake details being used by the fraudsters and the true details for the company so that members of the public could be confident in making sure they only dealt with the legitimate firm.

For example, the real website was www.wellesley.co.uk but the fraudsters had set up their own sites using www.wellesleypropertygroup.com and www.wellesley-group.com.

The clone firm promoted its own phone numbers and email addresses on its websites, although it did use the real firm’s postal address and subsidiary names to maintain the appearance of legitimacy.

It meant that only potential customers who corresponded with the clone firm by post might make contact with the real firm and, in doing so, set off alarm bells.

Correspondence sent out by the fake firm often lifted wording directly from the real firm’s promotional material, such as the description of what the firm does and the kind of investments it offers.

This level of detail would be more than enough to trick many people when combined with the newspaper advert, websites and 'company' email accounts, but David said those working in the industry became wary immediately when they saw the correspondence later on.

When he eventually sought advice from his accountant and HSBC adviser, they pointed to the level of spelling mistakes and errors in documents issued by the fraudsters and described them as looking “very amateurish” compared to the real thing.

“The woman at the bank said they’re seeing it on almost a daily basis,” David said.

But by the time he sought their advice in September and reported his concerns to Action Fraud, it was far too late.

Since making the report, he has heard nothing more about the progress of any investigation.

He said: “I’ve been robbed of £36,000, even though I did okay it. You would think that they would look into it.”

Although the money was transferred from David’s bank account, HSBC said in October that it could not reimburse him as he was the victim of an authorised push payment scam. This is when a person has asked for money to be transferred from their own account, rather than having money taken from it without their knowledge.

The bank’s letter said it would “share information with the beneficiary bank in order to investigate and determine whether any funds could be recovered.”

When contacted by the YEP, a spokesman for Action Fraud it could confirm that David's report had been received in September 2019.

"It was assessed by the National Fraud Intelligence Bureau (NFIB) at the City of London Police, which found there were not any leads that would result in a successful criminal investigation at this time," he said.

"The report has been recorded on our system as an information report and will be used by the NFIB for intelligence purposes.

"In time, further reports that link to this one might come into Action Fraud and viable lines of enquiry may then be established. If this happens, all of the reports will be sent as a ‘case’ to a police force for investigation.”

Also in crime: Police are warning about this HMRC phone scam operating in Leeds and Wakefield

Beware scheme that are 'too good to be true'

The Financial Conduct Authority (FCA) provides advice through the ScamSmart section of its website.

When it comes to bonds, it advises potential investors to be wary of schemes promising returns that sound too good to be true. Generally, the higher the return promised, the more likely it is to be a high-risk investment or a scam.

If someone advises, or arranges for you to buy a bond, you should check they are authorised by the FCA to do so.

Investments in bonds are not normally protected by the Financial Services Compensation Scheme, unless there has been misconduct by an authorised adviser or arranger.

The FCA advises anyone considering an investment or pension opportunity to treat it with extreme caution if there is:

- pressure to invest (eg. time-limited offers);

- downplayed risk of losing your money;

- promised returns that sound too good to be true.

It also runs a warning list of known firms running scams or operating without authorisation.

If the firm you are checking appears in on the list, the FCA strongly discourages investing.

Anyone who wants to check the legitimacy of a firm claiming to be FCA-regulated can call its consumer helpline on 0800 111 6768 or visit the authority's website.