Collective action and UK wine investment fraud

Abstract

Purpose The purpose of this paper is to examine the measures taken by legitimate wine investment companies and enforcement agencies to counter alternative investment scams. Design/methodology/approach The authors interviewed wine industry and law enforcement specialists to understand the nature of wine investment fraud and the characteristics of the victims. They also drew on secondary data in the form of government agency research and media sources. Findings The majority of wine investment frauds are boiler room operations, using social engineering techniques to draw victims into the fraud. The authors conclude that countering wine investment fraud requires public education by government, the wine industry and the police. Research limitations/implications This is a small-scale study that uses interviews with experts in the industry and in law enforcement and secondary data as evidence. Despite the limitations in the number of interviews, the authors are able to comment on the social impacts of alternative investment scams and suggest a theoretical basis for future work in the field. Practical implications The authors make a case for regulators and investors to be part of collective action through education and public awareness campaigns to combat alternative investment fraud. Originality/value The authors outline how collective action theory might be extended to investigate fraud prevention measures in other financial and commodity markets.

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