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There is usually help available.

By Dave Thrifty 

There seems to be a whole swathe of people out there who will do almost anything to make money, even at someone else’s expense. Unfortunately our industry is full of them, even on the regulated side of the business. The benefit of regulation is of course that there is usually recompense for dastardly deeds in the form of professional indemnity insurance or compensation schemes like in Europe.Dealing with unregulated advisers or investing in unregulated investments has a way of turning out not to be the “sure thing” that was sold to you. I know there are lots of you in Thailand who have experience of this and have seen their “advisers” move overseas to pastures new to find fresh prospects for brilliant investment ideas.

My friend Colin was approached by one of these super bright investment guys who was trying to persuade him to invest his entire pension into a hotel room in Cape Verde. Sure fire winner – you buy in off plan, you can sell later at a guaranteed profit, there’s even a buy back scheme and guaranteed mortgages, rental payments and so on. I told him to wise up and if he wanted to do something crazy, go and buy Apple, Amazon & Google shares. It turned out, he didn’t listen to me at all and I found out some years later he had signed up for the deluxe penthouse suite in Dunas Beach Hotel in Cape Verde. Moron, I thought, although he did finally tell me he had not followed my advice. This information only came out over lunch after I had been relating the story to him of another friend who had done something similar.

He told me the whole story – he had invested his entire pension into this one hotel room, however, the mortgage wasn’t guaranteed, the rent was not guaranteed, and neither was there any form of buy-back option. The pension trustees had allowed him to sign up to this and he was being threatened with legal action because he did not have the money to complete, because of the guaranteed mortgage was anything but. What a saga, however he did finally speak to me about this disaster, which I’d told him not to get into. He explained that he felt he couldn’t come to me for advice again as ignoring it had gotten him into this mess. I felt a bit awful, so agreed to help him sort it out.

What was the outcome? Probably a lot better than you would expect. You see a lot of the guys peddling this type of unregulated investment find it easier to get their hands on money that originates in regulated investment schemes, such as pensions. This often means there can be hope for those who think they’ve lost everything. And this was the case here. We were able to do two things, firstly, we carried out a forensic analysis of what had taken place during the whole sales process. This involved working with some of those who had sold the properties to build up a picture of how the units were distributed. We obtained lots of individual statements, brochures, presentations and additional documentation including numerous recordings. (A lot of the guys couldn’t remember all the details so decided to regularly record presentations and meetings – thank goodness for smartphones!)

Secondly, we sought to repudiate the contract and get his money back. This involved a few threats of legal action against the pension scheme trustees, although some recordings of meetings and telephone calls with the people selling the property also helped focus some minds. Although it took a bit of work, Colin got his money back and got compensated for his losses too, around 50% on top of the six figure sum he invested. What a result.Did we learn some lessons? Yes – we all did – it’s never too late to get (and take) the right advice and it’s never too late to approach us for help. As a result of what we did for Colin we have now helped numerous people who were in a similar situation.

If you have lost money through your pension scheme investments, help may be at hand.

Email David.Thrifty@yahoo.com