Picture not perfect for Ulster art investors

TRADING Standards officers are warning today that art is not always the pretty investment picture painted by enthusiasts.

The Department of Enterprise, Trade and Investment’s Trading Standards Service is looking into the case of a Northern Ireland consumer who bought a painting for £1,800 by telephone from a London company.

The company had told him they were selecting artistic works that would increase in value, and that the paintings would be rented to commercial premises.

“It seemed an ideal opportunity to acquire an asset that generated an income even as it appreciated in value,” Jimmy Hughes of TSS said.

But after paying him rental income for the first 10 quarters, the company had now gone into liquidation, leaving the investor about 65% down on the deal because the sale price had been inflated.

“The customer later learnt that the artist was selling the painting for 400 euros.”

Mr Hughes said that everything about the investment scheme appeared professional and convincing.

“The company operated from a prestigious address in London. The initial telephone approach was very persuasive and the prospectus was well presented.

“However, as only one of hundreds of unsecured creditors, the consumer now faces a major loss on his capital.”

The Financial Services Authority does not regulate investments in commodities like paintings and the TSS is aware of two similar schemes presently undergoing liquidation.

“Given the track record of these schemes, consumers should make thorough enquiries before making such a substantial financial commitment,” advised Mr Hughes.

“We have sent relevant advice packs to all investors in Northern Ireland listed as unsecured creditors.”

These packs and further advice are available from the Trading Standards Service on 028 9025 3900.