Fine Art "investment" mistake

AnotherJoe

harsh_but_fair said:

Being sold an unwise investment is not necessarily fraud or indeed indication of an unsound mind - the world is full of people (and always has been) who put their money in places thinking they will get a good return but they don't

 it would only be fraud if extremely untrue statements were made during the sales pitch but I would bet they have it off pat implying things or saying that some art has been sold five times its price which would be true but doesn't imply that all art would be sold to five times its price etc etc

you just need to put it down to experience there is no way you'll get it any money back and probably no way you will prove fraud unless you have a recording of the telephone call

The world isn't though full of people who spent all their money and then more (maxing out CC's to the tune of £30k IIRC after exhausting cash ) on "unwise" investments, especially ones that clearly are verging on scams, if not actual scams.

Rob_S

eskbanker said:

Section 75 relies on being able to demonstrate misrepresentation or breach of contract, so if everything has been verbal then it would be something of a challenge to go to a card company and say "I paid large sums of money to a company but have no evidence of what it was for, please reimburse me", and it would be much the same for chargeback.  Is there really no paperwork or emails, or anything?  Has he attempted to get anything in writing yet?

Scenario 2 isn't promising either I'm afraid - there is no law or regulation preventing people from paying over the odds for stuff, otherwise the art world would collapse....

There is some paperwork - he has received various paper invoices in the post, as well as credit card receipts. If we were in scenario 1 (and I don't know how to determine that), what evidence would we need?

Rob_S

AnotherJoe said:

Is your father also in denial and still thinking he's been astute or does he realise he's been scammed?

Bit of both, to be honest. I dread to think what's next.
Perhaps we need to explore the POA/LPOA (no idea what the difference is) route. Though convincing him to go along with it may be difficult. A serious stubborn streak and extreme lack of judgement is not a good combination.
Also, how would POA prevent him continuing to do this?

Stubod

POA would not help until it is "enacted"..ie you set it up and at the "appropriate time" (ie when they no longer have capacity), you can take control of their finances, so at present it would be of no help to you at all...

AnotherJoe

Rob_S said:

AnotherJoe said:

Is your father also in denial and still thinking he's been astute or does he realise he's been scammed?

Bit of both, to be honest. I dread to think what's next.
Perhaps we need to explore the POA/LPOA (no idea what the difference is) route. Though convincing him to go along with it may be difficult. A serious stubborn streak and extreme lack of judgement is not a good combination.
Also, how would POA prevent him continuing to do this?

Well, he'd have to cooperate in you taking away access to his bank accounts, running them on his behalf ,and the "POA" would enable you to do that. ( And its officially LPA, i was being a  bit casual and forgot the new name)

https://www.gov.uk/power-of-attorney

If he wont cooperate, either you'd have to take a pretty serious legal route, or just let him lose all his money. Which is what he seems to have done now. As a bandaid on the problem, get his phone numbers changed asap.

FWIW i wouldnt bother spending money on the health one, in my experience , no one asks to see it.

eskbanker

Rob_S said:

eskbanker said:

Section 75 relies on being able to demonstrate misrepresentation or breach of contract, so if everything has been verbal then it would be something of a challenge to go to a card company and say "I paid large sums of money to a company but have no evidence of what it was for, please reimburse me", and it would be much the same for chargeback.  Is there really no paperwork or emails, or anything?  Has he attempted to get anything in writing yet?

Scenario 2 isn't promising either I'm afraid - there is no law or regulation preventing people from paying over the odds for stuff, otherwise the art world would collapse....

There is some paperwork - he has received various paper invoices in the post, as well as credit card receipts. If we were in scenario 1 (and I don't know how to determine that), what evidence would we need?

Evidence of a breach of contract would obviously start with a contract, plus demonstrable breach - if the premise is that they claim to be storing artwork for him then suspicions and doubts (however strong) about this aren't enough, in the context of trying to hold a credit card company liable.  Perhaps it'll help to turn it round and look at it from a devil's advocate perspective that might be adopted by a card company who'll know nothing about this situation and who'll be keen to avoid forking out any of their own money - how would he convince them they he isn't going to get what he paid for?

Sailtheworld

Rob_S said:

AnotherJoe said:

Is your father also in denial and still thinking he's been astute or does he realise he's been scammed?

Also, how would POA prevent him continuing to do this?

Honestly? It doesn't much. If someone has capacity and enacts the LPA straightaway you still need their consent - it doesn't put you in charge of all their financial affairs. He's almost certainly got capacity (and if he hasn't you won't get the LPA anyway) - I was quite surprised for what passed for mental capacity in this regard so he needs to be on board.

It's a case of helping as much as possible / as much as he'll allow. I'd tip off his bank / credit card companies with or without an LPA then it's down to changing phone numbers / redirecting post etc.

Malthusian

Rob_S said:

Perhaps we need to explore the POA/LPOA (no idea what the difference is) route.

A "power of attorney" is a document which allows the attorney to act on a donor's behalf. The difference between a POA and an LPOA is that powers of attorney cease being valid when the donor loses capacity, unless they are lasting powers of attorney (or the older Enduring Powers of Attorney).

Because LPOAs and EPOAs have become standard planning (like Wills) whereas non-lasting POAs are quite rare, POA tends to be used as shorthand for LPOA.

Though convincing him to go along with it may be difficult. A serious stubborn streak and extreme lack of judgement is not a good combination.

Then have you considered the option of leaving him to it?

Not doing anything does not mean you don't care, if there is nothing you can do that actually achieves anything.

Also, how would POA prevent him continuing to do this?

It wouldn't. As long as he retains capacity (and the wherewithal to use it, which "stubborn streak" suggests he does he can carry on giving his money to whatever scams he chooses. Even if he had given you LPOA, there is no point in trying to stop him doing something because if a donor and their attorney are in conflict, and the donor has mental capacity, the donor always wins. The attorney will achieve nothing except getting the donor to revoke the LPOA, preventing them from helping later down the line when capacity has been lost.

Stubod said:

POA would not help until it is "enacted"..ie you set it up and at the "appropriate time" (ie when they no longer have capacity), you can take control of their finances, so at present it would be of no help to you at all...

Not correct - that was true of the old Enduring Powers of Attorney, but a Lasting Power of Attorney takes effect when it is registered, even if the donor still has capacity.

Unless you tick a box on the form saying that you only want it to take effect if you have lost capacity, which nobody should, as it's stupid.

AnotherJoe said:

Well, he'd have to cooperate in you taking away access to his bank accounts, running them on his behalf ,and the "POA" would enable you to do that.

To reinforce the above, it wouldn't take away access. Taking away access from the father is not possible until he has lost mental capacity.

mikb

Rob_S said:

AnotherJoe said:

Is your father also in denial and still thinking he's been astute or does he realise he's been scammed?

Bit of both, to be honest. I dread to think what's next.

From a scammer's point of view -- what's next is dictated by what's left. So -- pensions? "We can help you out to release your pension pot and get you some nice liquid access to money, just sign them over to us!" And if he owns his house, I'm sure someone will be able to help themselves to a chunk of via some "simple easy" equity release scheme. Take care, as others have said, scammers operate sucker lists. They may even offer to help him recover his lost money on the art scam, for a small up-front fee. Then another fee. Then some expenses, but "we're right on top of the scammers, any day now ..." repeat until cash runs out.

Reaper

The POA is rather irrelevant. In terms of getting something back that depends whether it is a complete scam (ie there are no pictures) or an inflated price scam (ie there are pictures but they are worth a fraction of what he paid for them).

If it's the latter I suggest insisting you take physical possession of the pictures so you can see what you have and attempt to sell them yourself. Saying you will collect them would be better than depending on vague promises of delivery.

If I had to guess I would guess the scammer has attempted to cover himself by buying actual pictures from unknown artists. Either way brace yourself for very heavy losses.