Don’t make a ‘pour’ investment decision this Dry January

Fake Reimbursement Offers For Former Investors

Hiding behind the high-profile brands, most fake wine peddlers are represented by pervasive groups who not only target you to get you invested in so-called high-return projects; on the contrary, they disappear when the client expects returns.

At the latest, after four to six years, they may call the same person to get a refund of their investment. The victim reported the sale of non–existent products, fake options on the internet, failure to deliver on purchases, theft at production/storage units, and misrepresentation of varieties and adverts of damaged wines.

With the growing travel restrictions and layoffs, the opportunity to sell fakes grew, and the new collectors who seek rare bottles are at risk of counterfeits. 

Many such firms claiming to be popular wine collectors work on a small scale. Some offer cask investments, promising over 500% returns in 10 years. The Knight Frank Rare Whisky Index depicts such figures, which tracks the variations in the price of rare varieties of whisky.

As the demand increased during the pandemic, many replicas were sold in the name of top brands worldwide. At the online platforms, a low-grade variety from the 50s with new brand labels and corks can be sold as prestigious luxury bottles that sell for millions, or one may get an Australian variety worth under $15 sold as a rare one.   

Most victims in the UK who invested in such schemes paid an average of £2K to the escrow account through a bank transfer. Some companies' directors and management teams have been arrested for publicising such businesses on their websites.

Of course, no victim can return their original investment, but one should know the crooks may even contact them to get an advance recovery fee. 

How Does It Happen?

Some of the former victims of such frauds reported they were contacted by the same group of people who tricked them into buying into such options, and they were asked to agree to resell their wines in return for an insurance or shipping fee.

Such groups advertise themselves as legitimate and reliable, and they have all the details, names, addresses and account details of the victims. They seek advance recovery fees from the previous victims. The groups into such tactics use high-pressure cold calling to the members to push them to buy into such schemes. 

All the adverts that the investors can get between 10 to 20 per cent in the year on wine investments are misleading and unreliable.

One should get the delivery order with an ownership certificate to get a reliable product. All fake firms sell such plans to naive clients seeking short-term gains, but when the bubble bursts, they realise the risks. 

How To Avoid It?

• Never provide your financial details to an unknown caller – even when the caller claims to know your name and bank details. 

• Do not agree to offers that ask for advance payment.

• Check the firm's credentials before signing any contract.

• If you are contacted by someone who claims to know about your previous loss in the wine project and wants a fee to get your money back, stop all correspondence with them.