The Issue

 

Along with hundreds of others, many of us have become victims of financial scams presented as legitimate or even “government-backed” investments. People have lost life-changing sums in some cases hundreds of thousands of pounds and are then left to deal with the consequences alone, with little support and no clear path to recovery. This is not an isolated issue. Thousands of people across the UK are being targeted by increasingly sophisticated scams that exploit gaps in the current system. Victims are often left navigating complex recovery processes themselves, sometimes paying out-of-pocket for help, while those responsible can continue operating or avoid accountability for long periods of time.

 

What Is Happening

 

In a specific case:

- A professional firm specialising in financial fraud raised concerns to the Insolvency Service around a year before a company entered voluntary liquidation, asking for intervention in the public interest
- No action was taken, and the company continued to operate and take investments, even though authorities were aware of an unauthorised collective investment scheme 

 

As a result:

- More people invested, unaware of the risks
- Banks did not identify or act on the warning signs
- The company later entered insolvency in a way that appeared legitimate

-Investors ultimately lost approximately £13 million in verifiable funds, with individual losses ranging from around £3,000 up to £500,000.

- Early interest payments gave investors confidence, but the administrators later found serious inconsistencies between what was promised and what actually existed

 

After insolvency:
- The activity was not formally treated as potential fraud within the insolvency process
- Banks treated claims as civil matters, refusing reimbursement

 

This position has continued with some banks despite:
- An ongoing police investigation
- Findings by the Financial Ombudsman Service that such cases are more likely to be scams than not

 

Some banks have now reimbursed victims, while others continue to delay or refuse.

 

System Failures

 

This situation highlights several clear failures:

- Warnings from experienced fraud professionals were not acted on
- Banks did not identify or escalate suspicious activity
- There is no clear coordination between regulators, banks, law enforcement, and insolvency practitioners
- Victims are left to navigate the system alone

 

In particular:

- Companies can enter voluntary insolvency without proper scrutiny, even where concerns have already been raised
- Directors can continue operating or potentially leave the country during long investigations
- Administrators may be appointed in ways that create conflicts of interest
- Creditors face difficulty replacing administrators even when concerns arise
- High fees reduce the funds available to victims
- There is no reliable, real-time oversight of the work being carried out

 

What Needs to Change

 

1. A Government-funded Scam Victim Support Service

Victims should not have to pay to recover their own money.

A free, government-funded service should be created to support victims of financial scams, working alongside existing services such as Action Fraud, but with a stronger focus on recovery.

This should include:

- Clear guidance on reporting and recovery
- Coordination with the victims, banks, regulators, and law enforcement
- Support in tracing funds, including internationally
- Emotional and practical support

 

2. Early intervention and accountability

- Authorities must act within defined timeframes
- Decisions not to act must be recorded with clear justification
- There must be accountability where inaction leads to further harm
- Independent oversight should review failures

 

3. Stronger responsibilities for banks

- Act immediately on credible reports of fraud
- Identify and escalate suspicious patterns of activity
- Work with other banks to trace and freeze funds
- Clearly explain decisions where reimbursement is refused
- Face consequences for delays or misclassifying fraud as a civil matter

 

4. Reform of insolvency processes

- Where banks identify credible signs of fraud, this must lead to mandatory entry into formal insolvency processes
- Where no warning exists, banks and regulators must monitor for unusual activity and investigate clear risks
- Insolvency must not be used to make potentially fraudulent activity appear legitimate
- Administrators must assess and state whether a case is more likely to involve fraud than not
- Identify differences between what was promised and what actually existed
- Keep real-time records of work carried out
- Use systems where records cannot be altered once entered
- Record updates only as separate, time-stamped notes
- Fees must reflect verifiable work
- Unclear or inconsistent records must trigger review and potential fee reduction
- All records must be transferred promptly
- Creditors must be able to replace administrators without unnecessary barriers

 

5. Temporary restrictions on directors under investigation

- Directors under investigation must be restricted from acting as directors
- Must not be able to set up or control new companies
- Measures must prevent movement of assets
- Where there is a risk, they should not be able to leave the UK during the investigation
- These restrictions must apply during the investigation period

 

6. Faster law enforcement response

- Better resourcing and training for financial fraud investigations
- Faster action, especially where funds have moved overseas

 

Why This Matters

Victims are being failed before, during, and after fraud occurs. Losses continue to grow, accountability is unclear, and recovery is limited. This needs to change.

 

Call to Action

We urge the UK Government and relevant authorities to take immediate action.

Sign this petition to help protect victims, ensure accountability, and prevent this from happening to others.