Support Victims of Investment Fraud & Misconduct

Issued by the Investment Fraud Committee (IFC) | APPG on Investment Fraud & Fairer Financial Services

Campaign: #FairTaxForFraudVictims

Overview

Numerous UK citizens—including pension savers, sports professionals, and public servants—have lost their life savings and pensions through investment and pension schemes involving suspected fraud or serious financial misconduct. Many of these schemes were HMRC-registered, promoted by FCA-authorised advisers, and appeared fully legitimate at the time. Yet, victims have been left to fight alone after their losses. Instead of support, many face aggressive HMRC pursuit for tax liabilities—sometimes spanning over a decade—even on funds they never received. Tragically, some have died waiting for justice.

Our focus is on the systemic failure to support victims after harm, not on proving individual criminality. These are people who:

- Acted in good faith and followed professional or regulated advice

- Reported concerns and suspected fraud but received no meaningful investigation or redress

- Have spent 10, 15, even 20 years trapped in legal and financial limbo

- They are treated by HMRC with a severity that ignores individual circumstances and causes significant trauma. Meanwhile, apparent rule-breaking, misconduct, and even suspected criminality often go unpunished, with enforcement bodies failing to act while victims face relentless pressure.

In short, a two-tier justice system is emerging: victims are penalised and isolated, while perpetrators often face no consequences.

Who We’re Focusing On (Initial Groups):

We are currently focusing on two groups disproportionately and visibly impacted:

- Pension savers, including public sector workers who acted on regulated advice

- Sports professionals, many targeted during or after their careers

We are preparing to extend support and investigation to:

- Military service members and veterans, who have raised serious concerns with the Committee about suspected pension and investment fraud cases.

Systemic Failures Across the Board

This is a top-down systemic issue requiring multi-agency reform. Sector experts report:

HMRC: No dedicated policy for fraud/misconduct victims.

Regulators: Poor oversight and enforcement against misconduct by regulated professionals.

Police: Inadequate mandate and training to investigate complex third-party advisor crime.

Financial Redress System: Litigation unaffordable: Ombudsman schemes inaccessible or time-limited. HMRC actions often outside evidence retention and limitation periods, making civil litigation time-barred and vital evidence unavailable.

Support Services: No formal victim support for those affected by financial crime or misconduct.

Our First Campaign Focus: HMRC Must Stop Punishing Victims

The Problem

Many victims—pensioners, professionals, sportspeople—are pursued by HMRC for tax on money never received due to fraud or misconduct, or in addition to their substantial financial losses. This includes:

- Years of interest and penalties

- Enforcement threats, including bankruptcy petitions

- Denial of debt relief, even when clinical professionals warn of suicide risk

- No HMRC policy distinguishes between intentional tax avoidance and genuine victimisation, causing unjust outcomes. 

Victims are essentially treated as culpable, while perpetrators face no consequences.

What We’re Calling For

The Investment Fraud Committee is developing a cross-party, evidence-based settlement proposal to:

- Pause HMRC enforcement in known victim cases pending policy reform

- Establish a fair, consistent framework for historic tax liabilities caused by fraud/misconduct

- Ensure HMRC applies its Charter obligations and Nolan Principles of fairness, accountability, and compassion

- Work with victims and specialists to develop trauma-informed decision-making

We are not asking for write-offs of legitimate tax debts but for recognition of the difference between tax avoidance and victimhood—and an end to compounding harm.

What MPs Can Do to Support Affected Constituents

- Write to HMRC and Treasury requesting a moratorium on enforcement against confirmed victims

- Support development of a formal HMRC fraud/misconduct victim policy

- Back the proposed settlement framework in debates or committees

- Raise the issue publicly in Parliament, calling for reform

- Urge HMRC to engage with the Investment Fraud Committee, victims’ representatives, and mental health experts

Why This Matters

This is a humanitarian crisis, not a technical tax issue. Clinical evidence shows victims face severe trauma—even suicide—due to aggressive enforcement. HMRC has legal discretion to pause and fairly resolve cases; what’s missing is policy clarity and political will.

A Key Missing Link: Victim Advocacy and Support

Victims of financial fraud suffer trauma comparable to other abuse victims, experiencing:

- Emotional distress, isolation, shame, fear of enforcement

- A confusing web of institutions (HMRC, regulators, police, courts) without clear guidance or redress pathways

- The burden of proving victimhood while being treated as culpable

Parallels and Precedents

Loan Charge Scandal

A familiar example of the human cost of aggressive tax enforcement, linked to at least 10 confirmed suicides. Reports describe:

- Severe mental health decline

- Family breakdowns

- Inability to work or access redress

- Loss of faith in public institutions

- Suicidal ideation triggered by HMRC communication or enforcement

Government reviews have yet to fully address harm, with calls for a full statutory inquiry ongoing.

Concerning Parallels:

Investment fraud victims show similar trauma:

- PTSD, suicidality, anxiety, homelessness risk

- Ignored clinical suicide risk alerts

- Years of pursuit with no resolution

- Good faith professional advice ignored; victims treated as tax cheats

What Must Happen:

- Government must recognise this as a public health crisis, not just tax or regulatory

- Parliament must demand an independent review of HMRC’s treatment of victims, enforcement policies, and mental health impact

-Clear assessment of state-inflicted harm similarities between Loan Charge and investment fraud victims

Immediate enforcement moratorium during review

We’ve Seen This Movie Before.

Without action, the UK risks repeating tragic mistakes, causing avoidable harm.

Post Office Scandal

One of the UK’s worst miscarriages of justice: innocent sub-postmasters were:

- Falsely accused, prosecuted, and imprisoned

- Subject to financial, reputational, and emotional trauma

- Driven to suicide

- This institutional failure—prolonged by government inaction—mirrors the treatment of investment fraud victims. Despite clear evidence of mental health impacts and calls for reform, HMRC aggressively pursues victims for tax on funds lost to fraud, while ministers downplay warnings.

This case is a painful reminder that ignoring evidence and failing to act causes catastrophic damage. Parliament and government must break the cycle, put victims first, and establish independent oversight.

Recurrent Institutional Failures in Major UK Scandals

Repeated patterns of denial, delay, and failure in scandals such as Post Office Horizon, Hillsborough, contaminated blood, Grenfell Tower, and Loan Charge have:

- Caused profound victim harm

- Forced long, difficult justice struggles

- Seen officials evade accountability while victims suffer decades of trauma

- MPs play a crucial role to scrutinise, hold accountable, and give voice to victims. 

Without sustained parliamentary action, injustices persist.

Investment fraud victims face a similarly troubling trajectory, with aggressive enforcement despite severe harm evidence. 

Urgent government response is required to prevent complicity in further harm.

Precedent: US Approach to Financial Fraud and Victim Support

The US treats financial fraud seriously, prosecuting offenders harshly (e.g., Bernie Madoff’s 120-year sentence) and supporting victims through:

- A Taxpayer Bill of Rights guaranteeing fair treatment

- Dedicated Taxpayer Advocate Services

- Relief provisions reducing or eliminating tax liabilities linked to fraud. 

This balanced approach fosters trust, protects victims, and upholds financial integrity.

Precedent: Eclipse Settlement as Model for Fair Resolution

HMRC’s Eclipse case showed that constructive settlement can provide:

- Clearer, fairer, affordable resolutions

- Avoidance of protracted litigation and financial distress

- Recognition of individual circumstances

- Use of discretionary powers in relation to “Dry Tax” to grant debt relief

A similar approach should and could be applied to investment fraud victims.

Proposal: Financial Crime Victim Advocate Service

Like advocates for domestic abuse or sexual violence victims, financial fraud victims need trauma-informed, specialist support to:

- Navigate HMRC, police, regulators, compensation bodies

- Provide emotional support and prevent re-traumatisation

- Reduce burden on MPs and civil servants

- Ensure dignity and fairness

This is a moral obligation, long overdue.

Why Parliament Must Act Now

Fraud is the UK’s most prevalent crime, yet victims face blame and no support. This is a Post Office-level injustice unfolding now. Parliament can lead reform to prevent harm, restore trust, and ensure victims aren’t punished for being deceived.

Who Are We?

The Investment Fraud Committee is part of the APPG on Investment Fraud & Fairer Financial Services, dedicated to raising this issue in Parliament and keeping it there.

Why We Need Your Support

This is a systemic issue affecting thousands, not isolated cases. Current tax treatment is unjust; victims suffer in silence, many at breaking point. There is an opportunity for meaningful reform to help support historic victims but also protect investors and pension savers who may be affected by this issue in the future. 

What You Can Do

- Support the #FairTaxForFraudVictims campaign

- Join or follow the Investment Fraud Committee

- Push for sensible tax policy changes

- Encourage improved policing, redress, and regulatory response

- Hear victims’ stories

Final Word

This isn’t about blame; it’s about fixing a broken system with humanity and urgency. No one should suffer for 20 years after trusting professional advice and losing their pension savings or earnings. It will only apply where genuine victimhood can be evidenced. 

Together, we can fix a broken system and deliver justice.

"This isn’t about blame. It’s about humanity. Let’s fix a broken system — before another life or home is lost."