Wine Scams

Once again the British press is reporting investment wine scams. This is a regular occurrence. Anyone investing in wine or in other commodities or works of art should only do so after they have established the credentials of the company they are dealing with and how they operate.

Some unscrupulous wine traders will take your money without purchasing the wine and keeping it in an honest manner on your behalf. You risk losing both your money and your wine.

There are many honest wine traders who will sell you a wine contract with the genuine intention of settling the wine contract in the future even if they have not actually purchased the wine. This is all well and good if the wine trading company is solvent and competently managed. However, the trader could mismanage the cash flow of his company and go broke; you therefore lose both your money and the wine.

If you borrow money to buy wine with the expectation  of making a capital gain and the deal fails, either because you have traded with a cheat or you have traded with an incompetent broker, then you could be hit by a triple "whammy": losing your wine, losing your capital and having to pay interest on the capital which you have lost.

Buyer beware.

http://www.thisislocallondon.co.uk/news/14454941.Solicitor_facing_jail_over___200_000_fine_wine_con/?commentSort=newest

http://www.bbc.co.uk/programmes/articles/4X2ZXXtVrP9Tl0fcdfbtnND/further-information