Alcohol investors lose £3m to fraud in 2023

The City of London Police is urging people to be wary about whisky cask investment advertisements as consumers lost £3 million (US$3.8m) through alcohol investment scams in 2023.

The Advertising Standards Authority (ASA) revealed 89 reports have been made to Action Fraud about alcohol investments throughout 2023, with losses totalling £3m.

In the run up to Christmas, the City of London Police is reminding people to ‘take proper measures online’ against fraudulent activity.

Detective inspector Nichola Meghji, from the Fraud Operations team at the City of London Police, said: “As we approach the run-up to Christmas, we would like to remind people of the potential risks associated with investment opportunities, especially around whisky.

“An investment of a cask of whisky may seem like a wise choice, and perfect as a Christmas present to some, but we would encourage everyone to stay vigilant and to not be sucked in – especially if adverts guarantee you will get year-on-year returns.

“Certain companies prey on people’s lack of knowledge around investment, which is then exploited at a great cost to the consumer.”

The City of London Police offered some advice to avoid becoming a victim of investment fraud. Advice included taking time to consider investment opportunities and not rushing to make investments, as ‘legitimate organisations will never pressure you into investing on the spot’.

Police offer advice

Additional guidance also included seeking advice before investing, including speaking to trusted friends, family, or professional independent services. Furthermore, the City of London Police also encouraged people to check the Financial Conduct Authority’s (FCA) register to see if the company is regulated by the FCA.

Mary Durcan, chair of the City of London Corporation’s Port Health and Environmental Services Committee, which oversees Square Mile’s Trading Standards operations, added: “City Corporation Trading Standards team has serious concerns over the whisky investment schemes that have sprung up over the last couple of years.

“Casks are being sold as a long-term investment because whisky takes time to mature in the cask, consumers are being told. This means that it could be several years before investors realise their investments aren’t performing.

“It is vitally important to remember that whisky investments are not regulated by the Financial Conduct Authority, which means that there is no recourse to the Financial Services Compensation Scheme if anything goes wrong.”

In September, the Cask Whisky Association (CWA) was established in an effort to protect consumers from fraudulent investment companies. After receiving some backlash from the trade, the CWA responded to concerns about impartiality.