Plenty of interest in these financial emails
QI KNOW that interest rates are starting to move up again after 10 years. But I don’t think that even if my bank gave me the full extra 0.25%, it would make much difference to my interest.
It would still be very low and below the rate prices are rising in the shops.
This made me very interested in a number of emails that I have received.
The sender and the details vary but summed up, they are all offering returns around 7% to 10% with some guaranteeing these figures for four to seven years.
If they can do this, why can’t my bank – or any other bank, whether on the high street or online? John L
AWHICH? SAYS: As you say, these tantalising offers hit inboxes on a daily basis. But to compare these deals with mainstream banks is to compare apples and avocados.
Few investments can totally guarantee your money’s safety – mainly from banks, building societies or National Savings and Investments.
But if you are prepared to accept risks – in stocks and shares, for example, you can do better than savings accounts.
These emails promise to put your money into areas which are not covered by financial regulations such as rainforest in Brazil, car parking spaces, foreign holiday homes, off-balance sheet financing, diamonds and a whole host of other esoteric investments. Some of these also appear in pension transfer scams.
The lack of authorisation means they can be offered by organisations which are not covered by the Financial Conduct Authority. Many are based in tax havens.
Some will ask you to certify you are a “sophisticated investor” – a tick is all it takes – a formula which allows selling without normal checks such as affordability and how you and your family would fare if your money evaporated.
If something goes wrong, you will not be able to complain to the Ombudsman nor claim on the Financial Services Compensation Scheme.
As 100% secure guarantees are impossible for these firms, internet investment companies may fund the first few years’ return from your own money by increasing the price of what you are buying – generally assets of which you have no idea of the real value. One company was selling land in Brazil at 50 times its actual cost.
The risk is that some will work, many won’t and some will disappear with your money.