Consumers are being warned about the dangers of unregulated alcohol investments, amid a surge in suspected fraud.
In the last four years, reports of fraud relating to investments in whisky and other alcohol products nationally have more than tripled, with total losses topping £50 million.
Now, the City of London Corporation’s Trading Standards team has published new guidance warning people to do their research about whisky cask and other alcohol investments and seek independent advice before parting with their cash.
Whisky and other alcohol investments have grown in popularity in recent years but unlike regulated investments, alcohol investments are not covered by financial compensation schemes if things go wrong.
City of London Corporation’s Port Health and Environmental Services Committee Peter Dunphy said:
“Alcohol investment fraud can have a devastating impact on people’s lives, with victims losing substantial sums of money and facing serious financial and emotional consequences.
“Consumers are often enticed by promises of significant returns which may never materialise, so it’s vital they take the time to understand the risks and seek independent advice before investing in unregulated products.”
The City Corporation is part of Operation Broadway, a multi-agency partnership aimed at disrupting investment fraud, with partners including financial regulators, HMRC and City of London Police.
Report Fraud, the UK’s national reporting service for cybercrime and fraud, received 112 reports nationally of alcohol investment fraud in 2023, rising to 174 the following year and 333 last year. With over 400 reports already this year, losses over the four-year period top £50 million.
People considering investing in alcohol are urged to do their research, seek independent advice and in particular ensure they will be the legal owner of the cask, not merely the person assigned to it.
They should insist on a full receipt, contract and details of storage or insurance costs and pay at least £101 by credit card, which will give them added legal protection.
The full guidance is available at https://tinyurl.com/bde2ubb8
