Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether the Government plans to introduce measures to require banks to reimburse people who have been misled by fraudulent investment schemes.

The Government takes the issue of investment fraud very seriously and is committed to protecting people and pursuing those who perpetuate scams wherever possible. In the area of pension scams in particular, the Government introduced regulations to ban pensions cold calling which came into force in early January 2019. Firms who break the rules could face penalties of up to half a million pounds.

If fraudulent investments were recommended by an authorised financial advisor, the consumer can seek redress by the advisor’s firm by bringing the case to the Financial Ombudsman Service (FOS).

In the event that the authorised financial adviser is responsible or a UK authorised collective investment scheme fails, consumers also have access to Financial Services Compensation Scheme protection. The FSCS provides compensation to customers of financial services firms that have failed. Since 2011 the FSCS has paid over £60 million to claimants.