Expats fight capital losses caused by offshore investment ripoffs

Published:  3 Apr at 6 PM
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2013 may yet be the year when expats worldwide turn on rip-off salesmen for offshore investment companies whose procedures have caused huge losses.

Popular expat destinations such as the UAE, Australia, New Zealand, Spain, and Thailand have long been plagued by hordes of unqualified salesmen intent on mis-selling offshore investment products to unsuspecting newcomers. The salesmen are only interested in the high commissions offered, and are knowingly peddling unsuitable products to their victims, with bona fide FAs becoming as angry as deluded investors at having to share the sector with rip-off merchants.

The internet is humming with individual reports of mis-selling, and financial journalists are fielding an increasing number of calls and emails requesting advice on how to deal with those responsible. According to the Lawyer publication, the scale of complaints about offshore investment companies and their methods is unprecedented.

Millions of inexperienced expat investors, many of whom are retirees, stand to lose much of all of their investments, even if they survived the 2008 melt-down. Last week, the UAE and Malaysia unveiled plans to regulate FA advisory standards, a useful move as a majority of unprincipled FAs operate deliberately in less regulated countries.

One retired British expat living at present in Thailand is a notable victim who stands to lose his £180,000 investment in a Dublin property fund set in an Isle of Man life insurance wrapper. The 68-year old former accountant, who prefers to remain nameless for fear of retribution, set certain conditions on the investment including access to his cash at all times.

When the global financial crash happened, his fund’s value plunged and was soon closed to redemptions, leaving him unable to access his money. Even although he has no access to his money, the Isle of Man company is still charging a management fee for the tax wrapper which he now understands was of no benefit to him.
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