The Great Fraud Fightback: How one woman took on her rogue financial adviser and won
Amber Waheed has written a book about her fight for justice after being duped into investing in expensive, high-risk financial products
One of the many personal finance issues across the Gulf region over the past decade has been the mis-selling of expensive, fixed-term financial products to unsuspecting customers.
That has also been the case in the UAE, which has adopted legislation against such practices.
Loaded with hidden fees, hefty exit penalties and high commissions for the rogue financial advisers who sell them, many expatriates have been duped into signing up for these complex savings products for up to 25 years – and have lost their life savings in the process.
Amber Waheed is one of them. As with many others, the Dubai-based British expat was looking for ways to secure her financial future after the devastating effects of the 2008 global financial crisis.
In 2010, friends referred her to Neil Grant, a Scottish financial adviser who ran Prosperity Management Consultancy in Dubai. Ms Waheed says there were no red flags about Grant when she met him as she trusted the word-of-mouth recommendations from her friends.
“The strongest thing was the referral because in Dubai, your friends are like family and your social circle becomes like your second home,” Ms Waheed tells The National.
“You wouldn’t refer someone unless you really vouched for them ... so that is the reason why I didn’t think [I should] check him out. There were no red flags at all.”
However, the business strategist, who moved to the UAE 11 years ago, lost $80,000 after being duped by Grant into signing up for five long-term fund investments that she believed were low risk.
It took six years for Ms Waheed to realise that something was fundamentally wrong with her investment.
“Basically, there were five funds in a trust and they were slowly getting suspended or collapsing,” she says.
"[But] the valuation statements were not showing that the funds were collapsing ... it was still showing a healthy return. That is how people did not realise what was happening.
"It was like a domino effect. By this time, it was 2015 and that is when I asked him if they were high risk and then I realised that these [funds] were start-up companies, which are high risk.
“And then in 2016, the whole thing started to unravel. That's when I started going to different regulators to try to piece together what was happening. When we finally understood that we'd be conned, that's when the story started.”
Rather than walking away and writing off her $80,000 investment, Ms Waheed decided to fight back and turned to the UAE Insurance Authority for help – marking the first step in what turned out to be an important legal case that eventually led to Grant being convicted by the Dubai Criminal Court for operating his business without a licence. He was fined Dh2,000 and is no longer in Dubai.
A civil case followed in November 2018, and a court-appointed financial expert recommended that Grant was liable for Ms Waheed's losses.
After numerous complaints from consumers who had been mis-sold long-term savings products in 2016, the IA announced a range of proposals to overhaul the financial services sector and how savings, investments and insurance policies are sold.
In October last year, the regulator unveiled new regulations aimed at streamlining life and family takaful insurance products to reduce mis-selling by financial advisers and better protect consumers.
The regulations include capping the overall commission that can be paid on a policy over its term, while financial advisers are also required to include a mandatory 30-day “free-look” period in the policy, which allows customers to cancel it free of charge within the first month.
The regulatory body also imposed increased disclosure requirements on financial advisers, who must provide customers with a benefit illustration before the policy begins and a policy statement every six months.
Financial fraud is a very sophisticated crime and most people are not quite sure how they have been scammed
Amber Waheed, author of The Great Fraud Fightback
“While the regulations in the UAE are improving and there is more protection for expats, one important lesson to be learnt from Ms Waheed’s experience is that financial advice must only be taken from firms which are regulated in the UAE,” says Nigel Sillitoe, chief executive of Insight Discovery and founder of the aggregator website whichfinancialadviser.com.
“It’s also vital to check the qualifications of the financial adviser. Our aggregator website not only offers tips, such as the key questions you should ask your adviser, but list all the regulated firms in the UAE. We are also starting to profile advisers who are qualified at Level 4 or above, the minimum standard in the UK.”
Consumers can also check if a financial adviser is qualified by searching for their name on the Chartered Insurance Institute's website.
The IA’s regulations are a step in the right direction, but it is difficult to estimate just how many people have been exposed to these types of financial products, Stuart McCulloch, senior executive officer at The Fry Group, says.
“If you look at the amount of people who have taken financial advice in the UAE going back 20 years, probably most people that have had financial advice have been exposed to high-charging products,” says Mr McCulloch.
“[However], the last couple of years, the media has been covering this a lot more, and more people have become nervous of financial advisers in general and, therefore, probably less people have been duped into some of these schemes.”
The Fry Group, which is located in the Dubai International Financial Centre, has helped a number of clients who have been mis-sold financial products, says Mr McCulloch.
“It’s very challenging to have these conversations with clients because invariably what happens is that some of them are not aware [of what happened] until they have had a discussion with us.”
“It's difficult because an adviser does not like to give someone bad news. But they need to know the reality.”
While Ms Waheed eventually got her money back, other investors are not so fortunate. She has written a book, The Great Fraud Fightback, about her experience in an effort to educate others about the dangers of rogue financial advisers driven by nothing more than high commissions.
“Financial fraud is a very sophisticated crime and most people are not quite sure how they have been scammed,” she says.
“This book reveals the plots and traps, [Grant’s] partners, legal loopholes and technicalities.”
After her experience, Ms Waheed admits that it was difficult to return to investing but realised she had no choice but to secure her financial future because “income alone is unable to do that”.
“But this time you're wiser,” she says. “You understand it more and you know what to look for. Then it's about sharing that knowledge and educating people; making them understand that if you don't want to be financially vulnerable, you have to be responsible for your money.
“This means understanding where it is going, understanding who to recruit and what to look for in a financial adviser. Reading my book would educate non-knowledgeable investors instantly.”
Updated: March 8, 2021 11:09 AM