A dad-of-two felt "ashamed" after he lost almost £65,000 in a "sophisticated" investment scam.
Colin Palazzo, 60, was looking to increase his earnings after having his hours cut at work. The Nottingham-based sales director worked at an office supplies company and his hours dropped from five days a week to three due to the rise in home working over the last few years.
Colin had taken part in investment trading before and believed a "lucrative" opportunity had landed in his lap in 2022, after receiving an email from a company claiming to be an investment firm. He told the Mirror: "I’d already done a bit of trading. I must have been on some sort of database because I got an email out of nowhere. I clicked through and it all looked good, including the reviews."
After going through a divorce and selling his house, Colin decided he would invest this money. He was assigned an account manager and was told that he needed to pay £215 to get the ball rolling. He explained: "My account manager set everything up, told me what I was buying, showing me what we’d made. I got up to £100,000 from investing £30,000. And every time they rang I was putting in another £3,000."
Colin thought he was investing his money
Colin has been able to reclaim some of his money back (Supplied)With experience in trading, Colin could see that the platform was matching what the market was doing, so there was no cause for suspicion. He was also frequently contacted by each week updating him on how his trading was going which helped build up his trust. He added: "They’re so good at keeping in contact with you. They spoke to me twice a week at least. We laughed and joked, they were really friendly. They even talked about going out for drinks to celebrate my wins."
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After a bit of time, Colin was warned by his account manager that his equity was "always at risk" and if something moved the wrong way, Colin would "lose it all". The scammers then persuaded him to start "hedging" his investments. Hedging is a financial strategy that aims to limit risks. Investors hedge one investment by making a trade in another. This meant Colin could have one investment do well, while another tanked.
During Christmas in 2022, Colin received a devastating call to say he was on the verge of going bust and he needed to deposit another £10,000 to stay afloat - which in a panic he did. He added: "A month later, there was a big move in Bitcoin and I went bust. I lost everything. A recovery team got in touch with me and they were so apologetic. They said they’d give me a £30,000 sub to get me back on, I just needed to put 5% in. I was thinking, the money I’d made could be for my kids, to help them buy a house."
However, not too long later, Colin went bust again and the same recovery team got in touch offering a helping hand but this time started having his suspicions. He said: “I think I knew it was a scam the first time the recovery team got in touch with me but I felt trapped. They had me tied up in knots. My girlfriend got wise when I started being quiet when she asked about my trading - but like a gambler, I couldn’t admit it to myself. She wanted to move in together and I said no. I was ashamed and I didn’t want to rely on her.“
He confronted the scammers who repeatedly denied any wrongdoing. Colin lost £65,455 overall by transferring money from multiple different bank and trading accounts onto the platform. Colin did receive scam warnings from his bank when he moved the money. He added: "The scammers knew what I was going to be asked so convinced me to just click through or they provided answers for me."
Colin said he had started investing for "all the right reasons" but just with the wrong people. The firm was not regulated by the Financial Conduct Authority, so therefore Colin was unable to take his complaint to the Financial Ombudsman Service or Financial Services Compensation Scheme.
Colin then contacted CEL Solicitors which offers to represent individuals who have been scammed on a "no win, no fee" basis and if successful, they charge a fee of 25%. CEL Solicitors managed to recover £34,489 of Colin’s money so far and is working on trying to recover the rest.
But if you have been scammed, you should first follow your bank’s official complaints process first, as this is free to do. Put your complaint in writing so you have a record of your incident. If your complaint isn’t sorted out in eight weeks, or you get a final response letter that you're not happy with, you can take your case to the Financial Ombudsman for free.
Jessica Hampson, Chairwoman of CEL Solicitors, said: “In Mr Palazzo’s situation, the scammers were always one step ahead. They made their platform appear legitimate to someone who was familiar with investing and they knew what banks’ scam warnings were saying. This scam was incredibly meticulous and shows the lengths criminals will go to. Banks need to do more to protect their customers. If scammers are wise to their warnings, they are outdated. Thankfully Mr Palazzo’s bank admitted partial responsibility so we could recover some of his losses.”
What to do if you think you’ve been scammed
If you think a scammer has got hold of your bank details, contact your bank straight away. You can call the 159 hotline, which will connect you to your bank. Passwords that have been leaked or compromised should be changed immediately.
Make sure you report scams and fraud to Action Fraud by calling 0300 123 2040, or through the Action Fraud website. If you're in Scotland, report a scam through Advice Direct Scotland on 0808 164 6000 or on the Advice Direct Scotland website. You can also report scams to Police Scotland on 101.
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