Claiming a bank refund after a scam (Pre-CRM)
Discussion
Looking for some advice for claiming back money from a retail bank after an investment scam.
Brief background:
Between 2017 to 2019, I invested in a property company that in turn was renting properties from landlords and reconfiguring them into HMO's using the guaranteed rent model (if you are familar with it). I won't go into the mechanics of how it all worked but safe to say, I did thorough research into them, visited their office, visited the properties that they were currently renting but also were in the process of being prepared to be rented out - on the face of it, it was legitimate business.
For the first 15 months, I received a monthly return as per our agreement for the investment and was at the point where I had received back my initial investment sum back and the remaining 21 months were due to the be "profit" on that investment. In 2019, as the break-even point approached, I then re-invested the initial sum received back into the business. A month later, the returns stopped not only for me but for every other investor.
Company went into liquidation latter half of 2019, the insolvency service stated a few years later that it was that it was operating a Ponzi-type-scheme where previous investors were being paid with new investors money. The director has been banned for 11 years and over the course of the last 5 or so years, we've (as a group of investors) pursued the business and the director to see if we could claw back any of our investment back. As expected, we were unsuccessful as all money had been "spent" by the business.
I recently came across a company called Refundee which looks into claiming money lost in investment scams. They basically write to the bank and see if they would be willing to refund any money. At the time, when the investments were made around 2017, it was relatively easy to transfer £10k, £20k etc - banking models like the Contingent Reimbursement Model (CRM) didn't exist and banks were not signed up to voluntary codes whereby the bank provide warnings to the end customer to check if it is a scam, provide the necessary checks and balances before a transfer(s) were made and if you fell victim to a scam, you would have a potential chance of getting a refund back from the bank if they failed in their duty etc.
I have now personally raised the issue with my bank for investments made in 2019 (the ones in 2017 fall outside the 6 years window so those can't be claimed for). The case is now currently being reviewed by the bank. They are now asking me to send across any evidence (contracts, literature etc).
FYI: I have retained all the signed contracts of investments with the business, which states things like the period of the investment, the investment sum, the stated returns, business name, address, signatures etc.... also original brochures that marketed the company and how it worked for both landlords and investors. I also have a filed PDF copy of the FT news article detailing that the business used investors money as a Ponzi-style scam (as they described it).
The bank is now asking me to send across any and all evidence relating to the case. My question is: what evidence COULD potentially jeopardise my case? What do banks look for when reviewing or determine a case for refund, especially one pre-CRM? My thinking is that sending them too much information may harm the case as potentially some information could be used to "get out" of refunding me. "Oh you knowingly signed the agreements / contracts, you went to visit the properties etc..." - therefore no grounds for refund. Anyone know what guidelines bank use? Of course I am fully expecting the claim to be rejected (after which i will approach the financial ombudsman) but wanted to give myself the best shot at this first time round.
Brief background:
Between 2017 to 2019, I invested in a property company that in turn was renting properties from landlords and reconfiguring them into HMO's using the guaranteed rent model (if you are familar with it). I won't go into the mechanics of how it all worked but safe to say, I did thorough research into them, visited their office, visited the properties that they were currently renting but also were in the process of being prepared to be rented out - on the face of it, it was legitimate business.
For the first 15 months, I received a monthly return as per our agreement for the investment and was at the point where I had received back my initial investment sum back and the remaining 21 months were due to the be "profit" on that investment. In 2019, as the break-even point approached, I then re-invested the initial sum received back into the business. A month later, the returns stopped not only for me but for every other investor.
Company went into liquidation latter half of 2019, the insolvency service stated a few years later that it was that it was operating a Ponzi-type-scheme where previous investors were being paid with new investors money. The director has been banned for 11 years and over the course of the last 5 or so years, we've (as a group of investors) pursued the business and the director to see if we could claw back any of our investment back. As expected, we were unsuccessful as all money had been "spent" by the business.
I recently came across a company called Refundee which looks into claiming money lost in investment scams. They basically write to the bank and see if they would be willing to refund any money. At the time, when the investments were made around 2017, it was relatively easy to transfer £10k, £20k etc - banking models like the Contingent Reimbursement Model (CRM) didn't exist and banks were not signed up to voluntary codes whereby the bank provide warnings to the end customer to check if it is a scam, provide the necessary checks and balances before a transfer(s) were made and if you fell victim to a scam, you would have a potential chance of getting a refund back from the bank if they failed in their duty etc.
I have now personally raised the issue with my bank for investments made in 2019 (the ones in 2017 fall outside the 6 years window so those can't be claimed for). The case is now currently being reviewed by the bank. They are now asking me to send across any evidence (contracts, literature etc).
FYI: I have retained all the signed contracts of investments with the business, which states things like the period of the investment, the investment sum, the stated returns, business name, address, signatures etc.... also original brochures that marketed the company and how it worked for both landlords and investors. I also have a filed PDF copy of the FT news article detailing that the business used investors money as a Ponzi-style scam (as they described it).
The bank is now asking me to send across any and all evidence relating to the case. My question is: what evidence COULD potentially jeopardise my case? What do banks look for when reviewing or determine a case for refund, especially one pre-CRM? My thinking is that sending them too much information may harm the case as potentially some information could be used to "get out" of refunding me. "Oh you knowingly signed the agreements / contracts, you went to visit the properties etc..." - therefore no grounds for refund. Anyone know what guidelines bank use? Of course I am fully expecting the claim to be rejected (after which i will approach the financial ombudsman) but wanted to give myself the best shot at this first time round.
Edited by samkings on Thursday 3rd October 10:09
samkings said:
Looking for some advice for claiming back money from a retail bank after an investment scam.
Brief background:
Between 2017 to 2019, I invested in a property company that in turn was renting properties from landlords and reconfiguring them into HMO's using the guaranteed rent model (if you are familar with it). I won't go into the mechanics of how it all worked but safe to say, I did thorough research into them, visited their office, visited the properties that they were currently renting but also were in the process of being prepared to be rented out - on the face of it, it was legitimate business.
For the first 15 months, I received a monthly return as per our agreement for the investment and was at the point where I had received back my initial investment sum back and the remaining 21 months were due to the be "profit" on that investment. In 2019, as the break-even point approached, I then re-invested the initial sum received back into the business. A month later, the returns stopped not only for me but for every other investor.
Company went into liquidation latter half of 2019, the insolvency service stated a few years later that it was that it was operating a Ponzi-type-scheme where previous investors were being paid with new investors money. The director has been banned for 11 years and over the course of the last 5 or so years, we've (as a group of investors) pursued the business and the director to see if we could claw back any of our investment back. As expected, we were unsuccessful as all money had been "spent" by the business.
I recently came across a company called Refundee which looks into claiming money lost in investment scams. They basically write to the bank and see if they would be willing to refund any money. At the time, when the investments were made around 2017, it was relatively easy to transfer £10k, £20k etc - banking models like the Contingent Reimbursement Model (CRM) didn't exist and banks were not signed up to voluntary codes whereby the bank provide warnings to the end customer to check if it is a scam, provide the necessary checks and balances before a transfer(s) were made and if you fell victim to a scam, you would have a potential chance of getting a refund back from the bank if they failed in their duty etc.
I have now personally raised the issue with my bank for investments made in 2019 (the ones in 2017 fall outside the 6 years window so those can't be claimed for). The case is now currently being reviewed by the bank. They are now asking me to send across any evidence (contracts, literature etc).
FYI: I have retained all the signed contracts of investments with the business, which states things like the period of the investment, the investment sum, the stated returns, business name, address, signatures etc.... also original brochures that marketed the company and how it worked for both landlords and investors. I also have a filed PDF copy of the FT news article detailing that the business used investors money as a Ponzi-style scam (as they described it).
The bank is bnow asking me tosend across any and all evidence relating to the case. My question is: what evidence COULD potentially jeopardise my case? What do banks look for when reviewing or determine a case for refund, especially one pre-CRM? My thinking is that sending them too much information may harm the case as potentially some information could be used to "get out" of refunding me. "Oh you knowingly signed the agreements / contracts, you went to visit the properties etc..." - therefore no grounds for refund. Anyone know what guidelines bank use? Of course I am fully expecting the claim to be rejected (after which i will approach the financial ombudsman) but wanted to give myself the best shot at this first time round.
Interesting that I had to copy and paste to quote this post because the quote function came back empty.Brief background:
Between 2017 to 2019, I invested in a property company that in turn was renting properties from landlords and reconfiguring them into HMO's using the guaranteed rent model (if you are familar with it). I won't go into the mechanics of how it all worked but safe to say, I did thorough research into them, visited their office, visited the properties that they were currently renting but also were in the process of being prepared to be rented out - on the face of it, it was legitimate business.
For the first 15 months, I received a monthly return as per our agreement for the investment and was at the point where I had received back my initial investment sum back and the remaining 21 months were due to the be "profit" on that investment. In 2019, as the break-even point approached, I then re-invested the initial sum received back into the business. A month later, the returns stopped not only for me but for every other investor.
Company went into liquidation latter half of 2019, the insolvency service stated a few years later that it was that it was operating a Ponzi-type-scheme where previous investors were being paid with new investors money. The director has been banned for 11 years and over the course of the last 5 or so years, we've (as a group of investors) pursued the business and the director to see if we could claw back any of our investment back. As expected, we were unsuccessful as all money had been "spent" by the business.
I recently came across a company called Refundee which looks into claiming money lost in investment scams. They basically write to the bank and see if they would be willing to refund any money. At the time, when the investments were made around 2017, it was relatively easy to transfer £10k, £20k etc - banking models like the Contingent Reimbursement Model (CRM) didn't exist and banks were not signed up to voluntary codes whereby the bank provide warnings to the end customer to check if it is a scam, provide the necessary checks and balances before a transfer(s) were made and if you fell victim to a scam, you would have a potential chance of getting a refund back from the bank if they failed in their duty etc.
I have now personally raised the issue with my bank for investments made in 2019 (the ones in 2017 fall outside the 6 years window so those can't be claimed for). The case is now currently being reviewed by the bank. They are now asking me to send across any evidence (contracts, literature etc).
FYI: I have retained all the signed contracts of investments with the business, which states things like the period of the investment, the investment sum, the stated returns, business name, address, signatures etc.... also original brochures that marketed the company and how it worked for both landlords and investors. I also have a filed PDF copy of the FT news article detailing that the business used investors money as a Ponzi-style scam (as they described it).
The bank is bnow asking me tosend across any and all evidence relating to the case. My question is: what evidence COULD potentially jeopardise my case? What do banks look for when reviewing or determine a case for refund, especially one pre-CRM? My thinking is that sending them too much information may harm the case as potentially some information could be used to "get out" of refunding me. "Oh you knowingly signed the agreements / contracts, you went to visit the properties etc..." - therefore no grounds for refund. Anyone know what guidelines bank use? Of course I am fully expecting the claim to be rejected (after which i will approach the financial ombudsman) but wanted to give myself the best shot at this first time round.
Anyway, what you appear to be saying is that you did 'Due Diligence' to your satisfaction and then sent money, but you are now looking to claim off your bank for not telling you to do Due Diligence prior to sending money?
Firstly sorry that you have been the victim of a scam.
If you are expecting your bank claim to fail anyway then I don’t see what you have to lose by simply giving them everything you have along with an accompanying letter to fully explain.
By not giving them everything and trying to be less than transparent with them doesn’t feel right.
I think if you chose this route then any declination to help won’t also be viewed unfavourably by the FO possibly.
Alternatively use Refundee and pay their capped fee of 18% inc vat which is on a no win basis and they presumably are better placed to at least give it a shot for you.
If you are expecting your bank claim to fail anyway then I don’t see what you have to lose by simply giving them everything you have along with an accompanying letter to fully explain.
By not giving them everything and trying to be less than transparent with them doesn’t feel right.
I think if you chose this route then any declination to help won’t also be viewed unfavourably by the FO possibly.
Alternatively use Refundee and pay their capped fee of 18% inc vat which is on a no win basis and they presumably are better placed to at least give it a shot for you.
RSTurboPaul said:
Interesting that I had to copy and paste to quote this post because the quote function came back empty.
Anyway, what you appear to be saying is that you did 'Due Diligence' to your satisfaction and then sent money, but you are now looking to claim off your bank for not telling you to do Due Diligence prior to sending money?
Agreed.Anyway, what you appear to be saying is that you did 'Due Diligence' to your satisfaction and then sent money, but you are now looking to claim off your bank for not telling you to do Due Diligence prior to sending money?
If the bank had poped up a warning to check that it's not a scam, would he have pressed the "yes I'm happy it's not a scam" button?
Banks can't be insurance against bad investments.
Getting your intial investment back in 15 months is something like an 80% yield which should be a huge red flag.
Edited by 98elise on Thursday 3rd October 12:19
RSTurboPaul said:
Interesting that I had to copy and paste to quote this post because the quote function came back empty.
Anyway, what you appear to be saying is that you did 'Due Diligence' to your satisfaction and then sent money, but you are now looking to claim off your bank for not telling you to do Due Diligence prior to sending money?
I'm saying that the banks at the time didn't have the safety nets in place to help check that money being sent not an scam or bogus investment like they do today. Lots of retail banks have now signed up to a voluntary code to help prevent customers becoming victims of fraud. Yes I am potentially using a legal loophole - but then that's no different to a lawyer trying to get their client off the hook or compensation using applicable laws. Is it right or wrong is a matter of judgement.Anyway, what you appear to be saying is that you did 'Due Diligence' to your satisfaction and then sent money, but you are now looking to claim off your bank for not telling you to do Due Diligence prior to sending money?
alscar said:
Firstly sorry that you have been the victim of a scam.
If you are expecting your bank claim to fail anyway then I don’t see what you have to lose by simply giving them everything you have along with an accompanying letter to fully explain.
By not giving them everything and trying to be less than transparent with them doesn’t feel right.
I think if you chose this route then any declination to help won’t also be viewed unfavourably by the FO possibly.
Alternatively use Refundee and pay their capped fee of 18% inc vat which is on a no win basis and they presumably are better placed to at least give it a shot for you.
Thanks Alscar. This was my initial feeling too regarding submitting all evidence. I have spoken to Refundee who advised me to write to my bank personally and take it from there. I think they feel pre-CRM cases have less chance of success (maybe?). Anyway, probably will just send everything but was looking if their were any similar cases people may have raised and won (or lost) and any experience - or perhaps a view from a banking insider that deals with this type of matter?If you are expecting your bank claim to fail anyway then I don’t see what you have to lose by simply giving them everything you have along with an accompanying letter to fully explain.
By not giving them everything and trying to be less than transparent with them doesn’t feel right.
I think if you chose this route then any declination to help won’t also be viewed unfavourably by the FO possibly.
Alternatively use Refundee and pay their capped fee of 18% inc vat which is on a no win basis and they presumably are better placed to at least give it a shot for you.
Greshamst said:
If you were provided the warning that banks provide now, would you still have sent the payments?
I can't answer that for sure; and neither can the bank. One thing for sure, the bank did not have any safeguards in place to at least have a chance of preventing it. According to the Quincecare Duty, a legal principle that places a significant responsibility on banks to detect and prevent fraudulent activities on their customers’ accounts. I think if Refundee has already asked you to write personally they must feel there is no chance of any form of refund.
As 98 said Banks don’t offer a contingency Insurance against poor investments.
Even if they did ask at the time “ are you sure “ you clearly would still have gone ahead and I doubt any loophole argument will help as presumably if there was a chance Refundee would have taken it.
If you have told the Bank “ everything “ and also bearing in mind you and the other Investors have spent considerable time already to get no money back , then if their answer is a no ( which sadly I feel will be the case ) I think you may have to leave it there.
I assume at the very least you may be able to claim some form of Capital Gains loss back against future investments depending on the type of investment made ?
Either way good luck.
As 98 said Banks don’t offer a contingency Insurance against poor investments.
Even if they did ask at the time “ are you sure “ you clearly would still have gone ahead and I doubt any loophole argument will help as presumably if there was a chance Refundee would have taken it.
If you have told the Bank “ everything “ and also bearing in mind you and the other Investors have spent considerable time already to get no money back , then if their answer is a no ( which sadly I feel will be the case ) I think you may have to leave it there.
I assume at the very least you may be able to claim some form of Capital Gains loss back against future investments depending on the type of investment made ?
Either way good luck.
samkings said:
Lots of retail banks have now signed up to a voluntary code to help prevent customers becoming victims of fraud. Yes I am potentially using a legal loophole - but then that's no different to a lawyer trying to get their client off the hook or compensation using applicable laws. Is it right or wrong is a matter of judgement.
I don’t think I’ve ever sympathised with a bank before! 
samkings said:
Greshamst said:
If you were provided the warning that banks provide now, would you still have sent the payments?
I can't answer that for sure; and neither can the bank. One thing for sure, the bank did not have any safeguards in place to at least have a chance of preventing it. According to the Quincecare Duty, a legal principle that places a significant responsibility on banks to detect and prevent fraudulent activities on their customers’ accounts. However the CRM, and linked scam procedures are there to stop people being scammed into sending money to mule accounts. Short term scams where a person is being duped into sending money to someone who isn’t actually who they say they are.
The bank account you sent money to belonged to the company you were dealing with. You did fairly detailed due diligence in to that company. You weren’t scammed into sending money somewhere it shouldn’t have gone.
It’s unlikely your claim will be upheld.
Also you say above you received most of your initial investment back, it was when you re-invested that the money was lost. So your claim is on the re-investment, so what fault is that of the bank?
You've been the victim of a very sophisticated, seemingly, property investment ponzi scheme. So no blame at your door either, based on what you said, it would seem you did due diligence. But don't see why your bank should have to pay, perhaps the bank of the Ponzi scheme directors should be partly culpable though for enabling the fraudsters and if their accounts were Audited by an external Accountancy firm perhaps them too, they should have seen the flow of money from new investors to existing investors if they had done their Audit correctly. I doubt it was big enough scheme to have Auditors though, or it collapsed when it did get big enough for Audit.
You've been the victim of a very sophisticated, seemingly, property investment ponzi scheme. So no blame at your door either, based on what you said, it would seem you did due diligence. But don't see why your bank should have to pay, perhaps the bank of the Ponzi scheme directors should be partly culpable though for enabling the fraudsters and if their accounts were Audited by an external Accountancy firm perhaps them too, they should have seen the flow of money from new investors to existing investors if they had done their Audit correctly. I doubt it was big enough scheme to have Auditors though, or it collapsed when it did get big enough for Audit.
98elise said:
Agreed.
If the bank had poped up a warning to check that it's not a scam, would he have pressed the "yes I'm happy it's not a scam" button?
Banks can't be insurance against bad investments.
Getting your intial investment back in 15 months is something like an 80% yield which should be a huge red flag.
This. All day. If the bank had poped up a warning to check that it's not a scam, would he have pressed the "yes I'm happy it's not a scam" button?
Banks can't be insurance against bad investments.
Getting your intial investment back in 15 months is something like an 80% yield which should be a huge red flag.
Edited by 98elise on Thursday 3rd October 12:19
OP, your own greed is to blame here and is where you should be looking for recompense. Stop looking for someone else to blame.
Greshamst said:
samkings said:
Greshamst said:
If you were provided the warning that banks provide now, would you still have sent the payments?
I can't answer that for sure; and neither can the bank. One thing for sure, the bank did not have any safeguards in place to at least have a chance of preventing it. According to the Quincecare Duty, a legal principle that places a significant responsibility on banks to detect and prevent fraudulent activities on their customers’ accounts. However the CRM, and linked scam procedures are there to stop people being scammed into sending money to mule accounts. Short term scams where a person is being duped into sending money to someone who isn’t actually who they say they are.
The bank account you sent money to belonged to the company you were dealing with. You did fairly detailed due diligence in to that company. You weren’t scammed into sending money somewhere it shouldn’t have gone.
It’s unlikely your claim will be upheld.
He did his due diligence and money went to the company was trying to invest in. For 15 months he was happy with his investment and even got his whole investment back.
Banks are not giving you investment advice when you send money.
I feel sorry for the OP, but it's not the Banks fault.
I get people's views on this. I went into the investment with my eyes open, knowing that it could obviously fail. Does it feel wrong to ask the bank for a refund? I guess I'm obviously at the point where if you don't ask, you don't get and I have nothing lose to lose but possibly something to (re)gain. That's where I sit right now. Is it morally right, is a matter of opinion. As mentioned above, I don't feel I will be successful in any case, even via the FO.
The FO may not be what you are expecting:
https://uk.trustpilot.com/review/www.financial-omb...
https://www.google.co.uk/search?q=financial+ombuds...
https://uk.trustpilot.com/review/www.financial-omb...
https://www.google.co.uk/search?q=financial+ombuds...
samkings said:
I get people's views on this. I went into the investment with my eyes open, knowing that it could obviously fail. Does it feel wrong to ask the bank for a refund? I guess I'm obviously at the point where if you don't ask, you don't get and I have nothing lose to lose but possibly something to (re)gain. That's where I sit right now. Is it morally right, is a matter of opinion. As mentioned above, I don't feel I will be successful in any case, even via the FO.
Of course it’s wrong. You made a crappy decision and now expect everyone else to pick up the bill…but because you sent money from a bank you somehow feel justified in asking them for money in order to recoup losses that you went into with your eyes open.
Word of advice for the future: most (if not all) of those companies trying to re-let houses in the way you suggest are flaky.
https://www.financial-ombudsman.org.uk/decision/DR...
Well the financial ombudsman just ruled in favour of the bank, for a case where a man tried to get the bank to refund him £7k because he felt he was scammed by two sessions with a couple of prostitutes.
You can’t win them all
Well the financial ombudsman just ruled in favour of the bank, for a case where a man tried to get the bank to refund him £7k because he felt he was scammed by two sessions with a couple of prostitutes.
You can’t win them all
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