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Heartache for savers who see pension pots collapse - as police launch investigation into Norwich firm

PUBLISHED: 07:00 09 December 2015 | UPDATED: 15:58 09 December 2015

Ann Lown and her husband Michael invested money with a financial adviser and have lost half of it due to a dodgy investment.
PHOTO BY SIMON FINLAY

Ann Lown and her husband Michael invested money with a financial adviser and have lost half of it due to a dodgy investment. PHOTO BY SIMON FINLAY

Savers from Norfolk have told of their heartache after seeing thousands of pounds wiped off the value of their pension pots after their investments collapsed.

Police investigation

It is understood police have arrested two Norfolk businessmen in relation to the collapse of investments.

The arrests on October 21 were carried out by detectives from the eastern region’s Money Laundering Investigation Team, amid an investigation into alleged fraud.

In a statement, Norfolk Police said: “Officers from the Eastern Region Special Operations Unit, assisted by Norfolk officers, carried out warrants at two addresses in Norwich, one address in Witton [near Brundall] and a fourth address in Dilham…in relation to an ongoing fraud investigation.

“Two men, aged in their 30s and from the Norwich area, were arrested on suspicion of fraud and have been released on bail until January 25 2016.”

An EDP investigation has found at least three cases where pensioners have lost large chunks of their savings after investing with the same company. There are, however, believed to be more savers affected.

The men who run the firm, who we cannot name for legal reasons, are now the subject of a police investigation into alleged fraud.

One of those affected is north Norfolk woman Ann Lown, 61, and her 67-year-old husband who have lost almost half of their savings – a six figure sum.

Mrs Lown, of Plumstead, near Holt, claims her money was invested in a high-risk scheme without her knowledge.

Investing

Pensioners and savers will often decide to invest their cash in a bid to grow their money.

This can include buying stocks, government bonds or investing in businesses. Many people will select a financial adviser to take care of this for them.

Typically, pensioners and people nearing retirement will select low-risk investments for their savings, which although are unlikely to grow significantly, are safer for investors.

Those who have lost money allege the firm was investing money into a high-risk scheme known as Contract for Differences.

The Financial Ombudsman said on its website that Contract for Differences carries a far higher level of risk than traditional gambling, because the consumer can lose more then their original investment.

It allows investors to “bet” on the value of shares going up or down over a set period of time, and rake in a share of the difference.

But because it involves trading with borrowed capital, the gains and losses are magnified and the risks much greater.

Now the mother-of-one and her husband will have to continue working longer than originally planned.

“It will affect our retirement plans,” she said. “That’s our retirement pot.”

Mrs Lown said she was devastated for those who had lost all of their savings.

“Our feelings go out to those people who have lost everything,” she added.

Ann Lown and her husband Michael invested money with a financial adviser and have lost half of it due to a dodgy investment.
PHOTO BY SIMON FINLAYAnn Lown and her husband Michael invested money with a financial adviser and have lost half of it due to a dodgy investment. PHOTO BY SIMON FINLAY

The problems centre on money pumped into a high-risk scheme, called Contract for Differences, which come with great risks, as well as potentially large gains.

Mrs Lown’s husband Michael realised something was wrong in March when he visited the office of the company. She added: “They just said ‘it’s one of those things, investments go down as well as up’.

“When my husband spotted something was not right that was when we got the rest of our money out.”

Mrs Lown and her husband hope their money will be returned to them, but added: “If it is lost we would be completely devastated.”

Ann Lown and her husband Michael invested money with a financial adviser and have lost half of it due to a dodgy investment.
PHOTO BY SIMON FINLAYAnn Lown and her husband Michael invested money with a financial adviser and have lost half of it due to a dodgy investment. PHOTO BY SIMON FINLAY

Great-grandfather Jim, (not his real name) said he had hoped to take a holiday with his wife and update his car.

But the Wroxham man, who is in his 80s, has seen his investment shrink by 40pc, a figure in excess of £20,000.

He said his money had been with the company for five or six years, and up until recently he had been pleased with the handling of it. “It has affected our plans for the future,” he said. “It means we can’t have any reasonable holiday at all, update the car or have a lump sum to leave for our family.”

Another 67-year-old man claimed 60pc of his wife’s pension had been lost, a figure reaching tens of thousands of pounds.

Do you feel you have suffered losses through this investment scheme? Email sabah.meddings@archant.co.uk

Do you have a story for the Investigations Unit? Contact David Powles on 01603 772478 or email david.powles@archant.co.uk


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