Investment fraud, a deceitful practice that preys on individuals seeking financial growth, not only causes substantial financial losses but also inflicts emotional distress and erodes trust in
financial institutions. Investment fraud victims often find themselves facing
devastating consequences, including loss of life savings, retirement funds, and
in some cases, their homes. Beyond the financial toll, victims grapple with
feelings of betrayal, shame, and a sense of helplessness. However, this complex
aftermath is currently a system that is failing victims, one in desperate need
of reform.
The Work and Inquiry of the Investment Fraud
APPG
The APPG on Investment Fraud has been a voice
for investment and pension fraud victims in parliament and served as a platform
for discussion and debate on systemic reform. It has been dedicated to shedding
light on the experiences of victims and advocating for meaningful change in
policy and regulation to prevent future occurrences.
Inquiry Findings: Tax Treatment of Fraud
Victims
The APPG held an inquiry into the tax treatment
of fraud victims and uncovered significant issues in the way victims are
treated for tax purposes.
Key findings & Calls for Reform include:
The
Conclusions drawn from evidence presented include;
• There is
very little to no support for victims following investment fraud.
• Victims
are struggling to navigate through a disjointed and complex system in the
aftermath of fraud.
• Tax
liabilities are blighting victims and are causing severe financial issues and
acute mental and physical health issues and family breakdowns.
• Victims
are feeling no sense of justice at all – especially from HMRC and feel they are
being failed by poor investigation and prosecution rates.
• Investigators
claim weak regulation and complex government backed incentive schemes have
being exploited by fraudsters.
• There
appears to be a significant lack of knowledge of specialist fraud knowledge
within the Treasury & HMRC and victims are reporting that HMRC exhibit in
practice very little empathy for victims.
• The
government’s new fraud strategy launched in May last year (2023), a
new Fraud Strategy : Stopping Scams and Protecting the Public, whilst welcomed,
does not deal with serious complex investment and pension frauds nor tax
liability issues.
Key Inquiry
recommendations included:
– A
moratorium and amnesty for historic victims to avoid foreseeable and
preventable loss of life and further harm to victims;
– An
independent government inquiry into this issue;
– Reform at
HMRC to include prioritisation adjustment, widespread training, new guidance
and the introduction of a specific unit and panel within HMRC to deal with
investment and pension fraud cases;
– The
introduction of new legislation to regulate HMRC’s
treatment and taxation of victims;
– The
introduction of a new victim welfare advocacy service.
Need for Reform & Collaboration with the
Fair Financial Services APPG
The inquiry underscored the urgent need for
reform in the tax treatment of fraud victims. The Fair Financial Services APPG,
recognising the urgency and importance of the issues raised by the Investment
Fraud APPG, stands in solidarity and support. The recent revelations regarding
HMRC’s treatment of investment and pension fraud victims, as brought to light
by the Investment Fraud APPG’s inquiry, are deeply concerning. The Fair
Financial Services APPG acknowledges the significant harm caused to victims and
shares the commitment to advocate for reform.
“APPG Co-Chair Alex Sobel, MP for Leeds North
West emphasised the need for a action:
“ The Government must now listen and put a
stop to this practice and ensure a better system of protection and support for investment
and fraud victims. What we have right now is a system causing great harm to
victims and compounding their trauma creating a double victimisation as they
are subjected to re-traumatisation and further losses by HM Revenue &
Customs. That must stop. A clear, transparent policy and new codes of practice
are urgently required at HMRC to ensure victims are treated appropriately. The
APPG will not rest until tangible improvements are delivered”
The APPG called for an immediate suspension of
charges against victims, an independent government review and reform at HMRC.
The Fair Financial Services APPG fully supports
the Investment Fraud APPG’s calls. Together, we must work tirelessly to
advocate for a system that prioritises victim welfare and holds perpetrators
accountable.
One of our members, Sir Stephen Timms, the
former Treasury Minister and Chair of the Work and Pensions Select Committee,
has echoed these sentiments, stressing the importance of a thorough,
independent review to safeguard victims’ rights and ensure fair treatment. He
stated:
“Treasury and HMRC have important and difficult
jobs to do. Its vital for all of us that they raise the revenues due, but there
must be appropriate checks and safeguards, as HMRC recognises in its Charter
Responsibilities. The system does not appear at present to be operating fairly
towards victims of crime. Careful steps to safeguard victims have been taken in
other countries, but not in the UK. With clear evidence of direct harm being
caused to victims, there is a compelling case for a thorough, independent
review. This inquiry supports the conclusion of the Work and Pensions Committee
in its March 2021 report that HMRC must do more to support scam victims left
owing large tax bills.”
Conclusion: Working Together for Victims’
Rights and Financial Justice
As the upcoming general election looms on the
horizon, the Fair Financial Services APPG recognises the critical importance of
uniting forces with the Investment Fraud APPG to address the pressing issues
facing victims of investment and pension fraud. Despite the myriad challenges
posed by economic, educational, and health crises dominating the political
agenda, our commitment to advocating for fair tax treatment, systemic reform,
and support for fraud victims remains unwavering. This is all vitally important
in ensuring a system of fairer financial services.
Aligned in our aims and driven by a shared
sense of urgency, we are exploring avenues for collaboration, including the
potential for formal merger. By pooling our resources, expertise, and advocacy
efforts, we aim to amplify the voices of victims, hold policymakers to account,
and champion tangible reforms that prioritise victim welfare and financial
justice. We want to ensure that the injustices uncovered by the Investment
Fraud APPG’s inquiry are not only acknowledged but also swiftly addressed
through concrete policy changes and legislative reforms and to help advocate on
behalf of victims to effect meaningful change.
New Members
To demonstrate our unwavering commitment to
tackling these critical matters, we are delighted to welcome parliamentarian Alex Sobel MP, who led the
Investment Fraud APPG inquiry into the tax treatment of victims and has been a
stalwart co-chair alongside Caroline Nokes MP for many years to the Financial
Services APPG. Additionally, we are thrilled to welcome Carly Barnes Short, a
seasoned lawyer and chair of the Investment Fraud APPG advisory board, to our
APPG, whose extensive experience and advocacy for reform bring invaluable
expertise to our group.
Together, we will continue to fight tirelessly
on this issue until every victim receives the fair treatment, support, and
justice they rightfully deserve.
You can find out more here:
APPG Report
Press Releases & Media Articles
Submissions to Parliament
The APPG on Investment Fraud has been a voice for investment and pension fraud victims in parliament and served as a platform for discussion and debate on systemic reform. It has been dedicated to shedding light on the experiences of victims and advocating for meaningful change in policy and regulation to prevent future occurrences.
Inquiry Findings: Tax Treatment of Fraud Victims
The APPG held an inquiry into the tax treatment of fraud victims and uncovered significant issues in the way victims are treated for tax purposes.
Key findings & Calls for Reform include:
The Conclusions drawn from evidence presented include;
• There is very little to no support for victims following investment fraud.
• Victims are struggling to navigate through a disjointed and complex system in the aftermath of fraud.
• Tax liabilities are blighting victims and are causing severe financial issues and acute mental and physical health issues and family breakdowns.
• Victims are feeling no sense of justice at all – especially from HMRC and feel they are being failed by poor investigation and prosecution rates.
• Investigators claim weak regulation and complex government backed incentive schemes have being exploited by fraudsters.
• There appears to be a significant lack of knowledge of specialist fraud knowledge within the Treasury & HMRC and victims are reporting that HMRC exhibit in practice very little empathy for victims.
• The government’s new fraud strategy launched in May last year (2023), a new Fraud Strategy : Stopping Scams and Protecting the Public, whilst welcomed, does not deal with serious complex investment and pension frauds nor tax liability issues.
Key Inquiry recommendations included:
– A moratorium and amnesty for historic victims to avoid foreseeable and preventable loss of life and further harm to victims;
– An independent government inquiry into this issue;
– Reform at HMRC to include prioritisation adjustment, widespread training, new guidance and the introduction of a specific unit and panel within HMRC to deal with investment and pension fraud cases;
– The introduction of new legislation to regulate HMRC’s treatment and taxation of victims;
– The introduction of a new victim welfare advocacy service.
Need for Reform & Collaboration with the Fair Financial Services APPG
The inquiry underscored the urgent need for reform in the tax treatment of fraud victims. The Fair Financial Services APPG, recognising the urgency and importance of the issues raised by the Investment Fraud APPG, stands in solidarity and support. The recent revelations regarding HMRC’s treatment of investment and pension fraud victims, as brought to light by the Investment Fraud APPG’s inquiry, are deeply concerning. The Fair Financial Services APPG acknowledges the significant harm caused to victims and shares the commitment to advocate for reform.
“APPG Co-Chair Alex Sobel, MP for Leeds North West emphasised the need for a action:
“ The Government must now listen and put a stop to this practice and ensure a better system of protection and support for investment and fraud victims. What we have right now is a system causing great harm to victims and compounding their trauma creating a double victimisation as they are subjected to re-traumatisation and further losses by HM Revenue & Customs. That must stop. A clear, transparent policy and new codes of practice are urgently required at HMRC to ensure victims are treated appropriately. The APPG will not rest until tangible improvements are delivered”
The APPG called for an immediate suspension of charges against victims, an independent government review and reform at HMRC.
The Fair Financial Services APPG fully supports the Investment Fraud APPG’s calls. Together, we must work tirelessly to advocate for a system that prioritises victim welfare and holds perpetrators accountable.
One of our members, Sir Stephen Timms, the former Treasury Minister and Chair of the Work and Pensions Select Committee, has echoed these sentiments, stressing the importance of a thorough, independent review to safeguard victims’ rights and ensure fair treatment. He stated:
“Treasury and HMRC have important and difficult jobs to do. Its vital for all of us that they raise the revenues due, but there must be appropriate checks and safeguards, as HMRC recognises in its Charter Responsibilities. The system does not appear at present to be operating fairly towards victims of crime. Careful steps to safeguard victims have been taken in other countries, but not in the UK. With clear evidence of direct harm being caused to victims, there is a compelling case for a thorough, independent review. This inquiry supports the conclusion of the Work and Pensions Committee in its March 2021 report that HMRC must do more to support scam victims left owing large tax bills.”
Conclusion: Working Together for Victims’ Rights and Financial Justice
As the upcoming general election looms on the horizon, the Fair Financial Services APPG recognises the critical importance of uniting forces with the Investment Fraud APPG to address the pressing issues facing victims of investment and pension fraud. Despite the myriad challenges posed by economic, educational, and health crises dominating the political agenda, our commitment to advocating for fair tax treatment, systemic reform, and support for fraud victims remains unwavering. This is all vitally important in ensuring a system of fairer financial services.
Aligned in our aims and driven by a shared sense of urgency, we are exploring avenues for collaboration, including the potential for formal merger. By pooling our resources, expertise, and advocacy efforts, we aim to amplify the voices of victims, hold policymakers to account, and champion tangible reforms that prioritise victim welfare and financial justice. We want to ensure that the injustices uncovered by the Investment Fraud APPG’s inquiry are not only acknowledged but also swiftly addressed through concrete policy changes and legislative reforms and to help advocate on behalf of victims to effect meaningful change.
New Members
To demonstrate our unwavering commitment to tackling these critical matters, we are delighted to welcome parliamentarian Alex Sobel MP, who led the Investment Fraud APPG inquiry into the tax treatment of victims and has been a stalwart co-chair alongside Caroline Nokes MP for many years to the Financial Services APPG. Additionally, we are thrilled to welcome Carly Barnes Short, a seasoned lawyer and chair of the Investment Fraud APPG advisory board, to our APPG, whose extensive experience and advocacy for reform bring invaluable expertise to our group.
Together, we will continue to fight tirelessly on this issue until every victim receives the fair treatment, support, and justice they rightfully deserve.
You can find out more here:
APPG Report
Press Releases & Media Articles
Submissions to Parliament