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‘I invested £70k in gold – but I’ve never received a penny’
Since time immemorial gold has been considered the ultimate “safe haven” asset. The price of the precious metal hit a record high in 2024, in part due to ongoing geopolitical crises and as protection against inflation.
Yet for Drew Donnelly, buying gold has turned into a “nightmare”.
He is one of several customers who approached Telegraph Money after losing as much as £100,000 in what he believes is a “sales-driven scam”.
In July 2021, Donnelly began researching gold and made an enquiry with the Royal Mint for a £50,000 purchase of bullion. Shortly after, he received an out-of-the-blue call from a company called The Gold Safe.
The Gold Safe acts as the introducer and advertiser for a second company called Trans Eco Minerals and Mining, which operates gold mines in Ghana.
A salesman explained that he could buy the gold at a special discounted price – 18pc of the London Bullion Market Association rate. Donnelly purchased £50,500 of “forward gold sales”. Forwards are a type of derivative contract where one party agrees to buy a certain amount of gold at a pre-determined time. A percentage of the total value of the deal is paid upfront. However, unlike futures contracts, forwards are sold “over the counter”, rather than via an official exchange.
Buying using forwards is markedly different from using services such as BullionVault, which allows you to buy gold online to be held physically in vaults on your behalf.
Alternatively, investors often opt to buy exchange-traded commodities, funds listed on the stock market designed to track the moving price of an asset like oil, or gold. This is a “safe, convenient and low-cost way to get exposure to gold,” according to Rob Morgan, of investment firm Charles Stanley.
The deal Donnelly bought promised that the gold would be delivered to his door two years later. Despite already having made a purchase, Donnelly says the salesman continued to telephone regularly in an attempt to convince him to buy more.
In August 2023, after more pressure from the salesman, he “foolishly purchased £20,000”.
Donnelly received a call from The Gold Safe ‘out of the blue’ after initially contacting the Royal Mint
“I felt uneasy about the whole thing from the get-go. Notwithstanding the bombardment of phone calls to get more money out of me,” Donnelly says.
When his delivery date approached, he was told that there was a delay and that he couldn’t be paid.
He says the reasons given for the delay kept changing. Initially he was told that laws in Ghana had changed and gold could no longer be shipped to the UK. He was then told that production had been halted due to the pandemic.
He was also told that the price of fuel had gone up. Donnelly has never received the gold or been able to get his money back.
Gold Safe’s customers fight back
“They are slick salesmen who have refined their pitch,” says Donnelly.
“The whole thing has been a nightmare. My health and family life have been greatly affected. I’m £71,000 down. It’s a lot to process mentally.”
Charles Stanley’s Morgan says that ensuring you are dealing with a legitimate business “is more difficult” when it comes to gold purchases.
The Gold Safe’s clients span a range of ages and backgrounds. Around 60 of the company’s customers have formed a WhatsApp group. It has provided vital support for the group in worrying times.
One man bought six contracts of gold bullion for £100,000, none of which has been delivered.
Their reasons for investing also vary, many of them deeply personal. One customer was left severely disabled after a car crash in 2017, and his “purchase was for my future wellbeing”.
Another has a brain tumour and wanted the money so that he could give up work and look after his three-year-old son. A single mother invested £5,000, which was everything she had.
An 80-year-old has lost all his savings after spending £45,000, while a 75-year-old investor has stage four liver cancer.
After a long campaign and countless hours of hard work by the group, banks are slowly starting to reimburse customers after conceding that it appeared to be a “scam”. Yet there have been discrepancies with the payments.
Between the 60 members of the group chat, there were 102 contracts. So far, 24 contracts have been paid out by banks including HSBC, Santander, Natwest and Lloyds after acknowledging that the clients were victims of an “authorised push payment scam”.
HSBC told one customer that “the case should be reviewed as a scam and in line with the Contingent Reimbursement Model.”
The CRM, a voluntary code that governed when banks should reimburse scam victims, has since been replaced with a mandatory code overseen by the Payment Systems Regulator.
‘Banks are operating a refund lottery’
Despite speaking to other Santander clients who have received their money back from the bank, David Schindler received a “curt phone call” to explain that his claim had been rejected. The bank has told him it is a “civil dispute”.
“This is unfair as other members of the WhatsApp group who bank with Santander have been offered a full refund,” he says.
“It very much seems like the whole banking industry is operating a bizarre lottery for who will be refunded or not. How can this be allowed to happen when the victims are into the tens of thousands in losses?”
Barclays has also reimbursed some members of the WhatsApp group but refused others.
Malcolm Shaw is in a similar position. The 64-year-old banks with HSBC, but it has not reimbursed him despite doing so to another client in similar circumstances.
Shaw has worked for the NHS for most of his life, and has tried to “save and live within my means”. He decided to use a lump sum from his NHS pension to buy the forward gold sales.
Malcom Shaw checked Gold Safe’s records on Companies House and TrustPilot before buying £23,500 of forward gold sales. ‘Everything seemed in order,’ he said
He bought two gold contracts in 2020: one in October for £12,000, and another in November for £11,500.
“My research had indicated buying some gold bullion could help to inflation-proof part of my savings at a time of low-interest returns. Those monies are important and are needed to help provide me with a reasonable standard of living,” he says.
Shaw checked the Gold Safe and Trans Eco’s records on Companies House, as well as extensive reviews on Trustpilot. Everything seemed to be in order.
But fast-forward to 2022, when his contracts were coming to an end, and he received a call from a Gold Safe representative explaining that he could no longer be paid in gold, and that it would have to be cash.
Like Donnelly, he received a barrage of explanations.
As the excuses grew so did Shaw’s suspicions and frustrations, so he went back on to Trustpilot to leave a review of his experiences. But he claims that as soon as he did, he was contacted by The Gold Safe, who asked him to take it down.
“People from The Gold Safe would call me and ask me to take the reviews down, explaining that it would hurt sales and therefore hurt my chances of getting my money,” he says.
Trans Eco has since declared insolvency, and in November 2024 a company voluntary arrangement (CVA) was produced. This allows the directors to stay in control of the business and negotiate with creditors.
The CVA established that: “The estimated dividend to unsecured creditors will be 17.12 pence in the pound after the costs and expenses of the CVA.”
According to the CVA, one creditor invested £338,435.96.
But the members of the WhatsApp group are not satisfied with the CVA and do not believe they were given the opportunity to present their case.
‘They’ve taken our security away’
Brandon Jeffery wanted to provide for his son’s future through an investment. He is unwell and has never been able to work. Jeffery “hoped the investment would serve as a means to provide for his future”.
“They have taken that security away”.
Jeffery, 62, comes from a farming family, but as his daughters opted not to pursue the same career, and with his son being unable to, he decided to invest money raised from selling the farm. In total, he invested £115,000.
Despite existing customers being told there was no gold in 2022, in April 2023 another man, who wished to remain anonymous, was contacted by The Gold Safe.
Like Donnelly, the man received a call from The Gold Safe and the salesman spun the same convincing tale.
“My wife and I are seasoned investors, we’ve got a real estate portfolio and other investments. We’re quite astute when it comes to where to invest and we’re very streetwise when it comes to scams,” he says.
They have never received returns on their £70,000 investments. “They should not be able to get away with this. It makes me cry,” he says.
The investment scheme is now being investigated by the Metropolitan Police, after a customer, who has also asked not to be named, reported it to Action Fraud in 2022. The case is ongoing.
At the time, he also contacted his bank to report the transactions. This led to Santander contacting HSBC, Trans Eco’s bank, and its account being frozen as a result.
The customer was then bombarded with calls from The Gold Safe.
“David Whatling [director of The Gold Safe] insisted I stop my action with Santander. He even e-mailed me a letter he had drafted for me to sign and send on to Santander,” he says.
In August 2024, Trans Eco clients received a letter stating: “Unfortunately, in March of 2024 our bank accounts were frozen by the authorities and up until now, they remain frozen. The cause of this being one or two disgruntled clients falsely accusing us of fraud. This of course has significantly hindered our progress and although we are still mining in Ghana, the lack of growth has dealt us yet another issue we must overcome.
“In addition to the freeze on our accounts, we are receiving a number of threats of legal action from disgruntled clients, so at present we are firefighting to protect the business, and of course you, the clients who understand our issues and are patiently waiting for contract redemptions.”
The Gold Safe says that it and Trans Eco were separate entities and that it was merely a broker for Trans Eco, Shaw says, yet when the latter’s account was frozen, Whatling immediately got involved.
Shaw believes that The Gold Safe knowingly sold contracts for Trans Eco despite being aware of delays and its inability to pay existing customers: “They never stopped telling people how great things were.”
A spokesman for the Financial Conduct Authority said: “If the touted returns on investments sound too good to be true then they probably are.”
The Metropolitan Police said: “An investigation into alleged investment fraud remains ongoing within the Economic Crime Unit. The investigation follows submissions made to Action Fraud relating to the trading of gold.”
A Trans Eco Minerals and Mining representative said: “With every obstacle and setback that has resulted in the delay in the redemption of forward gold sale contracts, we have taken and recorded advice from specialist insolvency advisers.
“We understand our creditors’ scepticism and frustrations and are deeply sympathetic to all concerned. Our only focus in the present and the future is to maximise returns to all creditors.”
A Santander spokesman said: “Protecting our customers from fraud and scams is a key priority for us, and we are currently reviewing Mr. Schindler’s case.”
A Barclays spokesman said: “The protection of our customers’ funds and data is our highest priority and before making investments we encourage everyone to take steps to satisfy themselves that the person or business they are paying is legitimate.
“We thoroughly review customer complaints on an individual basis, before reaching a decision based on the specifics of each case.”
A HSBC spokesman said: “Protecting our customers from scams and fraud is a priority for us, and we look at all information available to us when examining a case and coming to a decision. Based on the details available, we have deemed this case to be a civil dispute case opposed to a scam.”
The Gold Safe was approached for comment but could not be reached.
