Was it really Wise to close your account without any warning?
D.P. writes: In February, I opened an account with GMGroup.pro and deposited £200. My investment grew at a startling rate, reaching £524. This made me suspicious so I tried to make a withdrawal and was told I would have to open an account with Wise, a payment transfer company. In May, I opened the Wise account with a £20 deposit and instructed GMGroup.pro to transfer £300 into it. After several weeks they transferred £200, though my GMGroup.pro account showed a withdrawal of £300. I took out the
£200 from Wise, but now Wise says it has closed my account and if I want my remaining £20 I have to appeal.
LET’S look at the easy bit first. The Financial Conduct Authority warns that GMGroup.pro is a scam. There is a genuine investment company called Global Markets Group, the regulator says, but the firm you have been dealing with is a clone. It poses as an investment business, trading in currencies and commodities, but it is not authorised. When I looked further, I found that GMGroup. pro is registered on the island of Dominica, at an address I have seen before in scams.
The company that runs it is called Infinium Solutions Limited, which was also behind another scam, Future Currency Trading, which was targeted by the FCA.
A serious warning sign is that GMGroup.pro’s website is registered to an address in Iceland which is used by people who want to hide their real identity and location.
And the website fees have been paid for just one year, which is typically a sign that the business does not plan to stick around.
So, you were lucky to get back your original £200. But I was more concerned with what you told me about Wise. This is not a proper bank, but it is licensed by the FCA to act as a payment transfer company.
Originally known as Transferwise, it has been seen as a successful financial high-tech business, and its shares are listed on the London Stock Exchange.
I asked Wise why it had decided to close your account without warning. Its sudden decision is similar to those I have seen in money laundering cases, so I asked Wise whether it suspected you of this offence, and whether it had reported you to the National Crime Agency.
Wise refused to say. It reminded me that tipping off a suspected money launderer was also an offence in itself.
But Wise added that there could be other reasons for closing a customer’s account including ‘simply being associated with a scam’, even as a victim.
A spokesman explained: ‘We do this to help keep customers safe, and prevent them from losing further money if we believe they may be at risk of doing so.’
With all due respect to Wise, this makes as much sense as Transport for London deciding that if someone is mugged on the Tube, they should be banned from all its trains to help keep them safe. However, Wise says you need not lodge an appeal to recover the balance in your account. The remaining £20 is on its way.
I do wonder though, how strict Wise is in deciding which customers it wants and which it would like to ditch. Its chief executive is Kristo Kaarmann from Estonia.
He is currently under investigation by the FCA after he was fined £365,651 by the taxman for defaulting on a tax bill of over £720,000. But I bet Wise does not close his account.