Collective action and UK wine investment fraud

Purpose: The purpose of this research note is to examine the measures taken by legitimate wine investment companies and enforcement agencies to counter alternative investment scams.

Design: We interviewed wine industry and law enforcement specialists to understand the nature of wine investment fraud and the characteristics of the victims. We 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. We conclude that countering wine investment fraud requires public education by government, the wine industry and the police.

Research limitations: 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, we are able to comment on the social impacts of alternative investment scams and to suggest a theoretical basis for future work in the field.

Originality: We outline how collective action theory might be extended to investigate fraud prevention measures in other financial and commodity markets.