Fight goes on for Taylor brothers' victims to get their money back
PUBLISHED: 15:04 04 May 2018 | UPDATED: 15:04 04 May 2018
Financial advisors the Taylor brothers are in jail for a £17m fraud. But their victims are still owed hundreds of thousands of pounds. Some have even been forced to sell their homes to offset the losses.
They wanted a safe investment to see them through retirement.
But instead the money of more than 200 savers was secretly put into some of the most high-risk schemes on the market by the financial advisors they had trusted for years.
On Thursday, Norfolk brothers Alan and Russell Taylor began six and five year prison sentences respectively for the fraud which ran from 2008 to 2015.
David Constable was one of the first customers of Taylor and Taylor Associates to realise something was wrong in early 2015.
He had been with the Hoveton firm since 2011 on the recommendation of someone he had known for years.
The 64-year-old transferred his private pension to them, worth around £90,000.
At the start of March 2015 he was told by the company in a letter that following their annual review they would make no changes to the conservatively invested pension.
He was recently retired as a civilian worker in the police force and wanted to take no risks with it.
But unknown to him, by that point the Taylors had already put his pension in a scheme investigators would later compare to gambling at the races - it had lost tens of thousands of pounds.
At the end of March, his annual statement came through showing it had almost halved to £50,000.
“I thought ‘what the hell is going on,” said Mr Constable.
“As soon as I discovered the problem we went to see Alan in Hoveton.
“He blamed the commercial property crash, quantitative easing, and the Greek debt crisis. He tried to explain it by saying it was a new investment strategy.
“He had been betting on the stock market falling, but I didn’t want a bet.”
Mr Constable’s wife Marion, 70, said: “I was furious and worried. Alan was saying at the meeting ‘stick with me, I will turn this around’.”
To make up for the loss the couple sold their house and moved to a smaller one in Poringland, using the money to buy a second home which they could rent out to make up for the lost pension.
Mr Constable also contacted the Financial Services Compensation Scheme (FSCS) the next day which had already been made aware of Taylor and Taylor.
A little over a year later in May 2016, the grandfather-of-two got his money back.
“I still in many ways feel a fool because I look back and think, ‘could we have seen this coming’. With the benefit of hindsight were there tell tales we should have spotted?”
The FSCS pay out up to £50,000 per person and almost 180 customers have been paid back £4.9m by the scheme, but others cannot get their money back.
A retired businessman from Cromer, who doesn’t want to be named, was less fortunate.
He lost £32,000 of a pension he had put away for 30 years.
His wife had pancreatic cancer and they had repeatedly told the Taylors they wanted a safe haven so the money could be used to look after the 73-year-old when his wife died.
He had two funds with Taylor and Taylor. He got most of his investment fund back in compensation from the FSCS, but not his pension as only one claim can be made per person.
“I first started with Russell’s father, going back 30 years,” he said. “When he retired Russell and Alan took over so I just carried on using them. Russell used to come to my bungalow and sort all the paperwork out
“At the time my wife, who has now died, had pancreatic cancer and she said to him – these investment need to be the safest we can get as I would need someone to look after me when she died. Russell knew the situation and he blatantly lied. Through his lies I’m £30,000 out of pocket. It makes you lose faith in people.”
His retirement income has been halved and he now has kidney failure and is on dialysis.
“I’m disgusted as we have done nothing wrong,” he added.
His wife is one of two Taylor and Taylor customers who died from cancer while the fraud was being carried out.
In both cases the brothers knew they had cancer but carried on regardless, frittering the money away on risky investments.
•Fight goes on for compensation
Ann Lown and her husband Michael from Plumstead saw their savings halve in value after it was invested by the Taylors in risky ‘Contracts for Differences’.
Mrs Lown, 63, is one of several victims who expected a longer prison sentence for the brothers.
“Committing the fraud is serious enough but multiply that by the 200 plus people affected and £17m,” she said.
“Their defence said they were naive but they knew exactly what they were doing.”
Mr and Mrs Lown are still around £200,000 short from the fraud as payments from the compensation scheme are capped at £50,000 per person.
“The end of the court case starts another chapter,” Mrs Lown said. “There are too many questions unanswered, like trying to claim the rest of our money back.
“It is really galling that they and their families have lived the high life when people have died.”
Two of the victims died of cancer during the fraud.
•What happened when our reporter bought into mock high risk scheme
I wanted to understand just how risky the type of investment the Taylors put money into was - especially for those approaching retirement.
I used an online trading platform called City Index Ltd which lets you do a mock trade with £10,000 by buying the product the Taylors bought - Contracts for Differences (CFDs).
I bet on the stockmarket falling, like the Taylors had, buying 100 CFDs.
It meant every time the FTSE 100 fell by one point I would get £100. Every time it rose by a point I would lose £100.
After one day the market had risen by 48 points or 0.65pc leading to me losing half my virtual fortune.
Tiny changes in the value of the FTSE 100 led to massive losses. After four days I had lost £7,000.
CFDs are popular because your gains are tax free and you can trade on markets falling. But you may as well go to a casino and put your pension on black.