Govt warns on fraudulent CMCs targeting investors

Govt warns on fraudulent CMCs targeting investors

Fraudsters are contacting investors in defunct schemes claiming to be able to recover their lost funds for a fee, the government has warned.

The Insolvency Service published an alert yesterday (January 13) warning it was aware fraudulent claims management companies were targeting consumers who had invested in insolvent schemes claiming to be from the Official Receiver’s office.

The scammers tell investors they have been appointed by the Insolvency Service to help recover funds for a fee, but the government warned such approaches were “always fraudulent”.

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Official Receivers — an officer of the Insolvency Service tasked with collecting and protecting the assets of an insolvent firm — would never require a fee to get a client’s investment back, the government said.

It added: “The Official Receiver can only make a return to you as a creditor in failed schemes if it is possible to identify and sell any remaining assets owned by the liquidated company you bought your investment from.

“All too often businesses of this nature have few if any, assets left to repay creditors and it can take several years to undertake complex asset recovery work and complete a liquidation.”

The government also warned paying a fee would not make an investor a “priority creditor”, meaning the consumer would get paid faster or increase their chance of recovering funds.

The Financial Conduct Authority publishes a list of known fraudulent CMCs on its website, but the government said firms not on the list could also be fraudulent.

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