Thousands of people who were mis-sold investments in storage units could be targeted by criminals claiming to offer them compensation.
A This is Money reader has been sent a highly convincing fake letter claiming to be from the Financial Services Compensation Scheme and giving details of a redress scheme for investors in Store First Limited.
Store First was a storage pod investment scheme owned by Lancashire-based entrepreneur Toby Whittaker, which was wound up in court in 2019.
It promised investors that they would make a guaranteed 8 per cent income in the first two years, then 10 per cent in the following years.
Around 6,600 investors – many of them pensioners – were persuaded to invest and promised high returns from renting them out, which never materialised.
Adam Bennet who had invested in Store First received a scam letter purporting to come from the Financial Services Compensation Scheme (Stock image on left)
What is the Store First scam?
Reader Adam Bennet, whose name we have changed at his request, told This is Money he received what looked like a letter from the FSCS about a Store First Claim in July.
The FSCS has since confirmed this letter was not a real FSCS document. Instead it is a scam attempt, with the aim of getting out-of-pocket investors to fill out and return a form containing personal and financial information.
The fake letter told Adam to fill in and return a Proof of Debt form with his details or call a number to ‘lodge a claim’. The form attached claimed to be from The Insolvency Service.
A spokesman from the FSCS said: ‘We will never issue any forms on behalf of The Insolvency Service in the process of dealing with any claims.’
The FSCS confirmed that Adam Giles, whose name signed off the letter, does not work for it.
It also confirmed that the phone number used on the letter does not match the FSCS’s legitimate number.
The scam letter appeared on FSCS letter-headed paper which it confirmed was not legitimate. The FSCS said the formatting of the letter was also different from the current formatting the financial redress scheme uses.
What happened to Store First?
A High Court case was brought in April 2019 by the Government’s Insolvency Service over an unregulated £206million storage pod scheme established by Store First.
The court heard savers were lured into investing their money by ‘misleading information and testimonials’.
The Government pushed for Store First and related firms to be wound up to protect investors.
Store First and three other related companies were wound up in court in 2019.
One of them, SFM Services Limited, was bought out and now trades as Store First.
Adam said: ‘At first glance the letter looked pretty realistic with the FSCS logo, correct return address and the fact that the scammer clearly knows I invested in this unsuccessful storage investment.
‘I started to suspect the legitimacy of the letter when I looked up who the letter was signed by – Adam Giles, senior financial officer – and found that he was not listed on the FSCS website anywhere.
‘There was some strange wording in the letter which was also an alert.
‘It serves as a warning of just how believable some of these scam letters can look.’
Adam suspects that scammers could have got his personal information by hacking a database, or else by buying it from other criminals on the dark web.
Convincing: The scam letter in full, which could easily fool victims into thinking it was real
Can Store First investors get redress?
The FSCS protects up to £85,000 of the value of customers’ savings, pension or investments if a financial firm goes bust.
Store First was an unregulated scheme, so did not have FSCS protection directly, meaning investors are not protected by the Financial Conduct Authority (FCA) or the FSCS.
The FSCS confirmed it can look at claims for Store First investments where a regulated party was involved.
For example, where an independent financial advisor unsuitably advised a customer to take out an investment, or a Self-invested personal pension operator did not do the proper checks before accepting investments into a Sipp.
A spokesman for the FSCS said: ‘Sadly, scammers will try and use the identity of organisations like the FSCS to make a financial gain.
‘We have seen examples of fraudulent letters that use the FSCS logo and other details that are easily available online such as the name of a real firm to appear legitimate. We regularly update our website and social media channels to warn people about the dangers of scams.
‘The key message we would give is that the FSCS’s service is completely free – we would never ask for money in exchange for compensation.
‘It’s also very rare that we would contact someone who hasn’t got an active claim with us. We would always encourage anyone who has concerns about contact from the FSCS to call us directly using the details available on our website.’
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