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Expat Investor : July August 2007
Investors can claim compensation of up to £48,000 if they have lost money as a result of their dealings with any one of 29 firms that the UK's Financial Services Compensation Scheme (FSCS) has recently declared in default. The FSCS is the UK's statutory fund of last resort for customers of regulated financial services firms. It provides a free service to consumers. Declaring a firm in default is the final part of a process whereby a regulated firm (such as a financial adviser) has been found by FSCS to be unable to pay claims. This means that customers who have lost money as a result of dealings with one of these firms can make a claim for compensation to FSCS. The kinds of investment claims FSCS handles usually relate to advice - for example, if somebody has been advised to buy an investment product such as an endowment policy, but it was unsuitable for them and they have lost money as a result of the advice they received. FSCS can also pay compensation for financial loss arising from negligent investment management and fraud, or if an authorised investment firm stops trading and cannot return its customers' investments or money. Investors who believe they may have a claim should contact FSCS at email@example.com. www.fscs.org.uk July/August 2007 EXPAT INVESTOR 5 NEWS AND VIEWS *AER stands for Annual Equivalent Rate which is a notional rate illustrating the contractual rate as if paid and compounded on an annual basis. Zurich Bank International Limited, PO Box 422, Lord Street, Douglas, Isle of Man, IM99 3AF, British Isles. Telephone: +44 (0) 1624 671666 Fax: +44 (0) 1624 627526. www.zurichbankinternational.com Registered office: 43-51 Athol Street, Douglas, Isle of Man, IM99 1ET, British Isles. Zurich Bank International Limited is registered in the Isle of Man Number 22847. Telephone calls may be recorded. Licensed by the Isle of Man Financial Supervision Commission for Banking Business. To find out more, or request an application form call: +44 (0)1624 671666 (quoting ref no. EP1) Email: firstname.lastname@example.org or visit our website What if we could make our interest rate even more interesting? 6.25% GROSS PA/AER* Fixed for 1 year! Zurich Bank International R We're fixing it for a year! The Zurich Bank International 1 Year Fixed Rate Bond (Issue 3) gives you a superb annual interest rate of 6.25% gross. So if you want your money to work hard for the next 12 months, call us for an application form today. • Interest rate fixed for one year from account opening • minimum balance £10,000 • limited issue. www.zurichbankinternational.com Pretty well all investments involve some degree of risk. In many countries, the risks linked to stocks and shares are at least regulated by an investment watchdog that is supposed to make sure the punter gets a fair deal and is not blatantly lied to, sold completely unsuitable products or simply defrauded. Expats can be particularly at risk, dealing with brokers they do not know in a country they do not know. Or, dealing with brokers who speak their language but are based perhaps halfway round the world. It is good, then, to know that if you run into problems with a broker anywhere in Asia, the Asian Consumer Protection Bureau will step in on your behalf. Its website at www.asianprotection.org says reassuringly: "The Asian Consumer Protection Bureau has been established to promote investor confidence by providing more structure and oversight in the securities and capital markets. "The Asian Consumer Protection Bureau is responsible for regulating and examining the activities of key participants in the securities industry, concerned with ensuring an appropriate regulatory environment to protect investors, enforce the international securities laws, promote disclosure of important information, Watch out for fake watchdogs Fast Facts 66003 Financial investigator Tony Hetherington exposes bogus investment regulators promoting bogus stockbrokers. and sustain fair and efficient markets." So, if your broker rips you off, you simply contact the bureau's headquarters on the 30th floor of the Shinjuku Park Tower in Tokyo. Easy! And if you are unlucky enough to get a raw deal from a broker in the US, go straight to the National Shareholders Protection Agency. As it says on its website at www.nspagency.us:"The National Shareholders Protection Agency is very interested in receiving any complaint about the capital markets, including allegations of illegal insider trading, market manipulation, and inappropriate actions of market participants including registered brokers and reporting issuers. If you think a company has treated you unfairly in an investment-related transaction, you may file a complaint online." Or, you can drop the agency a line at its offices at 5100 Poplar Avenue in Memphis, Tennessee. There is even a watchdog covering brokers and financial advisers wherever they are throughout Europe. The European Consumer Protection Bureau, with its headquarters at 8 Exchange Quay in Manchester, boasts an impressive website at www.europeanconsumer.org, where it announces: "From oversight to education, the European Consumer Protection Bureau touches virtually every aspect of the securities industry." Between them these regulators protect investors in a huge list of countries. It is almost too good to be true. Sadly, it really is too good to be true. For every one of these watchdogs is a fake. The Tokyo address really belongs to an instant-office company that will take in mail for anyone who pays. In Memphis, a similar firm at 5100 Poplar Avenue offers 'virtual offices' for those who want to appear to be there without having to go to the trouble of actually renting a real office. And in Manchester there is no sign of the European Consumer Protection Bureau -- its address is just a maildrop. What is the point of all these bogus regulators? Well, they are there to give a clean bill of health to the equally bogus stockbrokers who use them. Any investor hesitating at the idea of parting with their money to an unknown broker is told to contact one of these watchdogs for reassurance. If you have doubts about any investment regulator, contact the official watchdog for the country you live in, and they can check the credentials of any regulator, anywhere. Or, check with the International Organisation of Securities Commissions, which lists genuine regulators on its website at www.iosco.org. One enquiry could mean you won't end up buying fake shares from a fake broker on the say-so of a fake regulator. Readers are invited to contact Tony Hetherington via the editor at email@example.com Claim up to £48,000