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Cold callers promote diamond fraud

20th January 2014

Fraudsters operating from boiler rooms are targeting the vulnerable in a new form of investment scam involving diamonds.

The cold callers are offering people high returns by investing in rare jewels. 

There have been reports of diamonds being marked up by 17 times their actual value. As an unregulated form of investment, diamond brokers do not have to be registered with the regulator, the Financial Conduct Authority.

DCI Matthew Bradford who is the head of crime at the National Fraud Intelligence Bureau (NFIB), operating at the City of London Police (CoLP) said police are conducting a number of live investigations into diamond fraud. 

In 2013, around 250 reports of diamond fraud were made into Action Fraud with more than 90 being sent on to forces by the NFIB for investigation.

Once victim lost over £90,000

One victim with Alzheimer’s was called by a firm pitching diamond investments and handed over £90,000 in three months. Each time a transaction was planned, he was told to keep it a secret.

DCI Bradford says: “Diamond fraud is just another yarn in what is a criminal web of deceitful boiler room scams, where individuals are targeted with cold calling on the telephone and pressured into making purchases of items, whether that is diamonds, shares or equities. They’re called boiler rooms because it is about exerting extreme pressure on people to part with their cash.”

Grossly inflated investment prices 

Criminals often use technical jargon, impressive job titles and mock websites to appear credible, and with many fraudulent schemes people are encouraged to keep the so called investment they are making secret to maximise returns.

DCI Bradford continues: “However, people who unfortunately become victim to this type of fraud are often sold items for prices that are grossly inflated against what they’re actually worth – as in a number of cases of diamond fraud. Sometimes the items don’t even exist.

“The fraudsters take people’s money on the promise of high investment returns, but the only people who gain are the criminals. I can only imagine how awful it must feel for people to discover that the savings they’ve accumulated in their working lives have vanished overnight as a result of this despicable criminal activity.

If you have been a victim of fraud, or believe you have information about a suspected fraud or scam - including diamond fraud -  please report by calling Action Fraud on 0300 123 2040 or use our online fraud reporting tool and receive a police crime reference number.

Related link

Investment fraud – Some things just aren’t worth the risk