OpinionJul 13 2016

Authorities must take fraud seriously

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My wife’s aunt, a sprightly 92-year-old, called me after she was phoned by somebody claiming to represent the Ministry of Justice, who told her she was entitled to a £3,000 tax rebate.

She was to put £100 onto a cash card – which would be collected by a courier – to pay for secure delivery of the £3,000.

She took the phone number and name of the person and called me wondering what to do with the information. I did not have a sensible answer.

Fraud is a nasty crime, whether it is a boiler-room scam, computer hacking or turning up on the doorstep of an elderly person.

People can be stripped of their life savings and left feeling humiliated and violated, often mistakenly blaming their own foolishness rather than the evil perpetrator.

Yet as Fraud Advisory Panel, chair, David Kirk, says, “Official support for fraud victims is still poor, and the local police response to the growing fraud threat remains inadequate.”

Launching a report, The Fraud Review – 10 years on, he noted: “Much fraud policing outside London is no better than in 2005, with little chance of any kind of investigation.”

Why this lackadaisical approach to fraud? Is it because there is usually no actual physical violence or because the victims are elderly or otherwise vulnerable and find it more difficult to raise merry hell with the authorities?

Banks, for example, may have taken steps to tackle some forms of fraud, but when large sums disappear, there can still be an attitude that it is the customer’s problem rather than the bank’s.

When large sums disappear there can still be an attitude that it is the customer’s problem rather than the bank’s

Expectations placed on consumers by those attempting to prevent fraud can be unrealistic.

A recent press release expressed horror that people often change their passwords less than once a year.

Yet most of us find it difficult to remember the passwords we already have. The idea of constantly changing them is a non-starter.

Police and government must treat fraud as a serious everyday crime in the same way as they would tackle a mugging, rather than passing it on to outside bodies or dismissing it as unimportant.

Every fraud or scam effects someone’s life negatively – and some have a lifelong impact. It is time those in charge recognised that, and responded accordingly.

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Danger of having all your cash under one roof

Property funds are no place for those who want their money in a hurry.

We saw this in 2008 when in turbulent market conditions New Star was forced to suspend trading on its International Property fund.

The fund had been launched in 2007, and was backed by a major advertising and marketing campaign.

But those who argued it was the wrong time to invest were proved correct.

Now as we once again navigate uncertain waters, property funds are under pressure.

Standard Life Investments last week suspended trading in its UK real estate fund in response to increased outflows. This was followed by M&G Investments and Aviva Investors and a raft of others.

Kames Capital, Henderson, L&G and Aberdeen were forced to make “fair value adjustments” to their open-ended property funds to protect existing investors.

Commercial property can offer much-needed diversity and can be a source of regular income. The danger comes when investors look to it as a generator of capital growth.

That is where some funds went wrong 10 years ago.

Those wishing to cash in will feel some financial pain – but the lesson is to understand the nature of an investment before parting with money.

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Brexit bad news is not the media’s fault

I wondered how long it would be before the media were blamed for the uncertainty following Brexit.

“I expect Brexit to be nothing like as bad for the world as the sensationalist media likes to portray,” said John Bennett, director of European equities at Henderson.

Which media has he been reading, I wonder, because many pro-Brexit papers were looking forward to a future outside the EU.

It was not the media that said Brexit would trigger an emergency budget to plug a £30bn hole in the economy; it was the Chancellor.

The National Institute of Economic and Social Research said Brexit could mean gross domestic product being between 2.1 per cent and 3.5 per cent lower in 2019 than it would otherwise have been.

City traders sent the stock market tumbling in the immediate wake of the Brexit vote. The governor of the Bank of England issued stark warnings of the consequences of Brexit vote.

The media reports on news and some of us comment on it. To blame the media for sensationalist coverage is a bit rich when you consider the source of the material.

Tony Hazell writes for the Daily Mail’s Money mail section. He can be contacted at t.hazell@gmail.com