Wine investment scam alert

Concerns are mounting over the level of fraudulent activity in the fine wine investment markets. This week saw evidence that fraudsters are assuming the name of reputable firms to persuade would-be investors to part with their cash.

Lionel Nierop, managing director of online wine auction firm Bid For Wine, said: "I’d like to draw attention to what appears to be a new scam in the already murky world of wine investment – namely hijacking the name of an established business.

"The fraudsters then use the name to sell wines for investment, presumably with the intention of pocketing investors’ funds and leaving the legitimate business taking the heat.

"I became aware of the ‘scam’ yesterday evening after I was emailed by a gentleman wishing to complain about several cold calls made to him, ostensibly by one of my employees. The caller was apparently rude and persistent.

"The email was a surprise and puzzled me for several reasons:

"Firstly we do not solicit for business by cold-calling.

"Secondly we have no employee with the name I was given.

"Thirdly I am deeply sceptical about wine investment in general. This stems from regularly having to auction off stock for people who have been mis-sold wines as being suitable for investment and have then seen the deal gone sour. I would always advise anyone considering putting their money in to wine to look beyond the sales pitch and, if still convinced, only to purchase wines from serious, long standing ‘blue chip’ merchants.”

As the price of investment level wines continues to climb, this problem looks set to become increasingly commonplace, requiring ever more vigilance from the trade.

One particularly useful reference point and forum is Jim Budd’s investdrinks.org, which includes a blacklist of companies whose credentials are believed to be less than sound.

Gabriel Savage, 18.11.2010