Representatives from EHD and London City Bond
(LCB) met with me on Tuesday 21st April in Central London to discuss
launching a new initiative – Bonds against the Scammers. In particular they
will now be sharing information with each other and investdrinks about scam wine investment companies.
Although in competition with each other, EHD and LCB are committed to making life difficult for wine investment scammers. This is certainly business that they do not want.
It is not wanted because wine should be enjoyable and they do not want to see their customers being ripped off. It is also not wanted because when things go wrong and the scam company goes bust or disappears, then it is usually the bonded warehouse that is left to pick up the pieces. Left to deal with understandably upset and irate investors, who may often have sunk a significant proportion of their life savings into wine they either doesn’t exist or for which they have been charged far too much.
Although the bonded warehouses are not in any way part of these scams, it is not surprising that some defrauded investors unfortunately assume that the bonded warehouses are somehow part of the scam.
HMRC (HM Revenue & Customs) and the money laundering regulations require bonded warehouses to carry out due diligence on customers wishing to open accounts. It is clear that these regulations put the emphasis on those wanting to open accounts to prove that they are legitimate.
LCB and EHD already do refuse to open accounts for companies they consider dubious as well as closing or freezing accounts of companies or individuals whose accounts arouse suspicion.
Often scammers refused an account at one bonded warehouse will apply to another bonded warehouse in the hope of slipping through. EHD and LCB agreeing to share information on companies and individuals refused an account or who arouse suspicion will make life more difficult for the scammers.
The bonds will also exchange information on their due diligence procedures and see how far these can be coordinated.
We hope that other bonds especially other third party warehouses like Octavian will join in this initiative.
Although in competition with each other, EHD and LCB are committed to making life difficult for wine investment scammers. This is certainly business that they do not want.
It is not wanted because wine should be enjoyable and they do not want to see their customers being ripped off. It is also not wanted because when things go wrong and the scam company goes bust or disappears, then it is usually the bonded warehouse that is left to pick up the pieces. Left to deal with understandably upset and irate investors, who may often have sunk a significant proportion of their life savings into wine they either doesn’t exist or for which they have been charged far too much.
Although the bonded warehouses are not in any way part of these scams, it is not surprising that some defrauded investors unfortunately assume that the bonded warehouses are somehow part of the scam.
HMRC (HM Revenue & Customs) and the money laundering regulations require bonded warehouses to carry out due diligence on customers wishing to open accounts. It is clear that these regulations put the emphasis on those wanting to open accounts to prove that they are legitimate.
LCB and EHD already do refuse to open accounts for companies they consider dubious as well as closing or freezing accounts of companies or individuals whose accounts arouse suspicion.
Often scammers refused an account at one bonded warehouse will apply to another bonded warehouse in the hope of slipping through. EHD and LCB agreeing to share information on companies and individuals refused an account or who arouse suspicion will make life more difficult for the scammers.
The bonds will also exchange information on their due diligence procedures and see how far these can be coordinated.
We hope that other bonds especially other third party warehouses like Octavian will join in this initiative.
