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15/03/2004
TSS issue warning on 'art' investment
The Trading Standards Service (TSS) has issued a warning to consumers invited to invest in paintings.
It comes after the TSS was contacted by someone who had bought a painting for £1,800 following a telephone call from a London based company.
The company told the consumer they were selecting artistic works that would increase in value and that the paintings were to be rented to commercial premises.
However, although the buyer received rentals for the first 10 quarters, the company has now gone into liquidation. In addition, the customer later learnt that the artist was selling the painting for 400 euros. Allowing for the rental payments and the actual value of the painting, the loss will be at least two-thirds of the initial investment.
Jimmy Hughes of the TSS said: “The company operated from a prestigious address in London. The initial telephone approach was very persuasive and the prospectus was well presented. However, as only one of hundreds of unsecured creditors, the consumer now faces a major loss on his capital.”
The Financial Services Authority does not regulate investments in commodities like paintings and the TSS said it was aware of two similar schemes presently undergoing liquidation.
“Given the track record of these schemes, consumers should make thorough enquiries before making such a substantial financial commitment,” Mr Hughes advised. “Investors who made their initial payment by credit card may have rights against the credit card company. We have sent relevant advice packs to all investors in N. Ireland listed as unsecured creditors," he concluded.
(MB)
It comes after the TSS was contacted by someone who had bought a painting for £1,800 following a telephone call from a London based company.
The company told the consumer they were selecting artistic works that would increase in value and that the paintings were to be rented to commercial premises.
However, although the buyer received rentals for the first 10 quarters, the company has now gone into liquidation. In addition, the customer later learnt that the artist was selling the painting for 400 euros. Allowing for the rental payments and the actual value of the painting, the loss will be at least two-thirds of the initial investment.
Jimmy Hughes of the TSS said: “The company operated from a prestigious address in London. The initial telephone approach was very persuasive and the prospectus was well presented. However, as only one of hundreds of unsecured creditors, the consumer now faces a major loss on his capital.”
The Financial Services Authority does not regulate investments in commodities like paintings and the TSS said it was aware of two similar schemes presently undergoing liquidation.
“Given the track record of these schemes, consumers should make thorough enquiries before making such a substantial financial commitment,” Mr Hughes advised. “Investors who made their initial payment by credit card may have rights against the credit card company. We have sent relevant advice packs to all investors in N. Ireland listed as unsecured creditors," he concluded.
(MB)
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