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FACE THE FACTS


The Recruits

Presenter:     John Waite

TRANSMISSION: Thursday 28th January 2010 1230-1300                   BBC RADIO 4

Waite
This week we investigate a company whose website bears the slogan "integrity
defined". But we'd like to suggest it be amended - just slightly - to "integrity
redefined". For this is a company which signed up young jobseekers to costly IT
training courses. It guaranteed jobs to those inexperienced and desperate for work in
the depth of a recession. Yet all that many of them have to show are debts of many
thousands of pounds which they owe to one of Britain's biggest banks.

So much then for those glossy boasts on the company's website…

       Promotional Literature
        We act with integrity, respect and honesty at all times offering a brand that
       clients can trust.

The company concerned is a recruitment firm called Fraser McKenzie Limited which
claims to have offices in Dubai, Kuala Lumpur, Chennai and Sydney. We do know it
had branches in London, Bristol, Birmingham, Manchester and Glasgow.

One of its clients, impressed by those promises of "integrity, respect and honesty", is
Jamal Smith-Graham. He's featured on the Fraser McKenzie blog recommending the
company.

Smith-Graham
Fraser McKenzie were really helpful in getting me my job. I was a little bit
concerned as I didn't have much experience. However, Celine arranged a work
placement and I was then offered the junior network engineer role, paying £18,000
with one of London's leading IT support companies. Things are going really well as
they are a great bunch and I'm working hard - a bit too hard sometimes. Lol. Thanks
for all your help.

Waite
That's a glowing endorsement Jamal?

Smith-Graham
Indeed it is - but I never made it.

Waite
Those are supposed to be your words.

Smith-Graham
Those are supposed to be my words and when I actually read it on their blog I was
amazed because I couldn't say anything like this because it's lies.

Waite
We know that at least 900 people across the country signed up with the company and
we've spoken to scores of them while making this programme. Instead of the stable
and rewarding careers in IT they'd hoped for they're left feeling cheated and misled.

Vox pops
I've got these qualifications where I can't get a job in IT and I've had this four and a
half thousand pound loan over me, it's been a disaster.

They said we'll give you the training, we'll give you a job - brilliant, that's why I went
with it. I just feel so - so let down.

No job, a loan to pay back - it's been very stressful, it's been upsetting and it's been a
waste of my year.

        Actuality
        Trewin
        So I'm just going to run through a few things. I'm going to talk about what we
        do both socially and commercially and where responsible IT is heading.

Waite
Troy Trewin runs two IT companies - one is a not for profit training company, the
other a commercial IT support business - Lucidica. When I visited, he was addressing
a new intake of apprentices. .

        Actuality
        Trewin
        So our mission is to help young people in the UK with a talent and passion for
        - but no experience in - IT to start up a successful career. So our vision - what
        we want to be - is as successful as Jamie Olivier's Fifteen Foundation. Hands
        up those people who have heard of Jamie Olivier's Fifteen Foundation ...

Waite
Why do young people find this industry so attractive?

Trewin
Well IT, I think, is ever changing, it's really challenging, it's stimulating the mind.
Also the money is a factor as well. When I talk with new recruits that have started
with us - why did they choose IT - a lot of them are saying it's a safe stable career,
technology's always going to be there and it's always going to go wrong so they're
always going to need, for example, us - a support company - as well as companies that
are doing more innovating and proactive things. The recession has - from what we've
seen - really increased the level of people applying for positions with us, not only that
but the calibre of people applying has dramatically increased. For some of our really
junior positions - say trainees and even apprentices - we've seen CVs come through
with people that have MBAs or Masters, so it is quite startling to see those come
through.

Waite
So this is a very highly competitive business?

Trewin
Absolutely. Coming out of university, especially, a case in point is when we advertise
at Lucidica for an engineer position we used to get 300 applicants for every role and
since the recession started we saw that increase up to around 500.

Waite
And just as IT jobs and training places are highly competitive - so is the business of
providing training.

Trewin
There are a lot of training providers out there, there are a lot of IT qualifications and if
you know which qualifications you really need to be attaining, whether it's after
university or before university, that is going to help you get on the right career ladder,
because there are so many ladders in technology and then to get you on that first rung
or two having the right qualifications, whether it's a Microsoft certified systems
engineer or a Compita or an Apple certification, security certification - whatever it
may be - knowing exactly what you should be studying for and attaining is a big
advantage because you don't waste a year or two studying for a qualification that
actually doesn't have any value in the area of technology that you want to be a
specialist in.

Waite
And a lot of those specialist courses are provided by hundreds of small, specialist
private companies - in an industry that generates around a quarter of a billion pounds
a year. But it's a precarious business.

Trewin
We've had four engineers so far that have been through external training companies
before they came to us. Most of them got their piece of paper before the companies
went under but all three of the companies that these four engineers went through are
now in administration or in the process of.

Waite
And what does that represent of your workforce - four engineers?

Trewin
It's around half, a bit under half of our engineers.

Waite
So 50% of people that you have employed have come a cropper before?
Trewin
Yeah around that I'd say - around 40-50% of our current engineer level have been
through one of these training companies.

Waite
In fact, two of those four IT engineers that Troy Trewin mentioned there went to the
same company. Yes, you've guessed it..

       Promotional Video
       Fraser McKenzie is a global staffing provider with a local presence. We aim
       to inspire clients and individuals alike with our positive approach to
       recruitment solutions ...

       For the complete recruitment solutions from CV makeovers to job placements
       - Fraser McKenzie.

A promotional video for the firm, which also features more glowing testimonials from
people who claim to have benefited from signing up.

       Testimonials
       I was doing admin work, just general filing. It's really good that you get the
       qualifications and you don't have to pay for them as long as you stick with the
       programme. It's been very interesting. Very, very challenging and really
       enjoyable so far.

       Previously I was at university and I did an IT degree. I chose this programme
       because I know it will give me the opportunity to pursue a career within the IT
       sector. It's challenging, energetic and it's fun.

And a testimonial from Jamal Smith-Graham, a graduate in maths and computing
from the University of London has also been used by Fraser McKenzie - this time on
its internet blog. But, as we heard earlier, Mr Smith-Graham says it didn't come from
him. He wishes he'd never heard of them when, in July 2008, he was struggling to
find a job.

Smith-Graham
I really thought that I would be able to get a job pretty quickly. I got good GCSEs,
good A levels and AS levels and went to a good university. But it just didn't turn out
like that. I was going through hundreds of jobs but everyone was asking what
experience did I have in the field and even though I had a Saturday job in a Saturday
school and I did all their IT, it wasn't enough.

Waite
In his efforts to find IT work, Mr Smith-Graham also posted his CV on online
recruitment websites - a common way of matching employers and would-be
employees in this sector - with individuals listing their training, education and
experience, and if a company has a suitable vacancy they can call the person
concerned. Mr Smith-Graham's CV prompted a call from that self-professed "global
staffing provider" Frazer McKenzie.
Smith-Graham
They rang my mobile phone randomly saying: "Are you still looking for work?"
"Yes." "Well can I talk to you about this great opportunity?" "Mmm okay." And
then they said: "Yeah we have this scheme where we get people into work and train
them up, come down to our offices and we'll tell you more about it." Why not?

Waite
Why not indeed? After all he had nothing to lose .. or sadly so he thought. So, at
Fraser McKenzie's office near Tower Hill in London, he signed up for one of their
training schemes. He bitterly regrets it now - because, 18 months on, he's been left
paying off a £5,300 debt. And he's not alone.

Morgan
I'd been out of work for five years because I'd had Thomas, my son. I decided to go
back into work when he started full time education. And so I thought well this is a
brilliant opportunity to get into a career that's got brilliant prospects and I could make
a lot of money doing something that could be lots of fun.

Waite
Rhi Morgan is in her twenties, with a five year old son. She used to work in a music
store, but after bringing up Thomas to school age, decided to try to make a career in a
subject which had always interested her - IT. As well as applying for jobs, she too
posted her CV on recruitment websites. And in November 2008 she too received an
encouraging call from Fraser McKenzie.

Morgan
For them to be phoning me and saying we'll snap you up for this, it seemed like too
good an opportunity to pass up.

Waite
So you went along?

Morgan
So I went along for the interview. It was a fancy office block in Central London. I
was sent upstairs to a delegates' lounge, which again was very smart. They first of all
went over what the course would involve - mostly e-based learning - so I'd be doing it
all at my own speed at home on the computer but there would be compulsory classes.
And there'd be a series of exams, at the end of which they could guarantee
employment.

Waite
Rhi Morgan signed up, and is now facing the prospect of having to pay back more
than £8,000. That guaranteed job didn't materialise.

Fraser McKenzie didn't only find its trainees on recruitment sites. They also
advertised in university newsletters, and on a website run by the Mayor of London.
And they had of course their own website with that "integrity defined" slogan
prominently displayed.
Rajesh Chand, a Manchester University graduate in multimedia computing, came
across them while surfing online. Though he'd worked as a web developer while
studying, he'd found it difficult to get a job after graduating. So he too was invited
along.

Chand
In February I came to Temple Row in Birmingham where their offices were held.

Waite
That's here.

Chand
That is where we are today. And I met with one of their consultants. A very basic
general interview stating why I wanted to do IT, what experiences have I got.
Answered everything and then towards the end she said: "Okay, we're happy to offer
you a position, we'll train you." Fraser McKenzie will offer me a nice job and with
that I can step in the IT ladder and progress my career and everything would be hunky
dory.

Waite
Everything wasn't hunky dory. Mr Chand started his online learning but not his
classroom lessons. He is still looking for work in the IT Sector . And could have to
pay just over £8,000 as a direct result of that trip to see Fraser McKenzie at their
Birmingham office.

So what exactly had Jamal Smith-Graham, Rhi Morgan and Rajesh Chand signed up
for?

The IT training was towards what's called a MCSE - a Microsoft Certified Systems
Engineer. To quote Microsoft itself...

       Microsoft qualification
       The MCSE credential shows clients and employers that you can design,
       implement and administer infrastructures for business solutions based on
       Microsoft 2000 Windows server and other Window server platforms.

Microsoft also says that the qualification is for "IT professionals" with:

       Microsoft qualification
       ...one to two years experience in designing, installing, configuring and trouble
       shooting network solutions.

Which would surprise Rhi Morgan as she had no experience whatever in IT when
Fraser McKenzie signed her up to the MCSE course. But then company documents
reveal that Fraser McKenzie had a somewhat lower entry threshold for students it
wanted to sign up.

       Fraser McKenzie entry criteria
       No experience is necessary, however, candidates must have a positive attitude
       towards developing a career in the technology sector.
Which may reflect the fact that Fraser McKenzie never was the actual training
provider for these students, and the hundreds of others who have lost money. It was
perhaps more of an incentive to sign up as many as possible. Fraser McKenzie has
made it clear to us it quote "acted as a sales representative" for another company
which was responsible for the content, delivery and cost of the training. That
company is PPI Learning Services.

Most students couldn't afford the course fees of around £4,000 so Fraser McKenzie
offered another option - taking out a loan via a subsidiary of Barclays, Barclays
Partner Finance, which has been demanding repayment from them.

The Institute of IT Training is the professional body which accredits training
providers. And according to its chief executive Colin Steed there are number of ways
people can pay for courses.

Steed
One is that you can get a career development loan, another way is the individual has
been made redundant and has got some savings but the most common way is for
individuals who are so desperate to get into a job they take out a personal loan. Loans
are very common, probably around 70 or 80% of people take out loans for these
courses.

Waite
But what of this situation where one company is selling the courses but the training is
provided by another?

Steed
In this market it's quite common and you get a lot of companies who will contract a
sales organisation to sell courses on behalf of a training provider.

Waite
And how common is it for courses to be sold by one company, run by another
company and finance provided by a third company?

Steed
That is uncommon and that worries me.

Waite
Why does it worry you?

Steed
Because there's too many variables there and there's no control over the three parties -
there's no quality control - who is the individual dealing with? They may have been
sold something by one person in the company, when they get on the course it might
be completely different.

Waite
And of course they've taken out this loan that's been arranged for them.
Steed
Exactly right, they've taken out a loan, the external company sell courses and get the
commission for selling. The training provider then, as far as the loan's concerned,
they will get that money up front. I don't know of many companies that do that.

Waite
Well it may have been highly unusual but the Fraser McKenzie offer had a couple of
features which made it highly attractive. Firstly a "Job Guarantee Scheme" and also
the promise that those loans could be repaid by the company if the student finished
the course on time and took that guaranteed job.

So in November 2008 and February 2009, in the middle of a recession, Rhi Morgan
and Rajesh Chand respectively signed contracts with Fraser McKenzie which
included this guarantee:

       Fraser McKenzie Guarantee
       The recruitment provider agrees to refund the candidate's course fees in full in
       the event he or she is unable to seek employment after completing the said
       modules and obtaining the said certifications as per specified in this agreement
       within the designated time frame of 12 months commencing on-line learning
       and has failed to find employment within the 90 day period after he or she has
       completed the said modules and accompanying examinations….

Essentially then the deal was that trainees would only end up paying the cost of the
course if they failed to complete it and pass its exams within 12 months, if they took a
job they found themselves or if they refused a job offered via Fraser McKenzie's
recruitment business. In all the cases we've featured the job guarantee scheme was the
crucial factor in their decision to sign up with Fraser McKenzie. Including young
mother Rhi Morgan.

Morgan
I wasn't too worried about taking out the loan because I was signing up for IT training
and a job at the end of it, for which the company - Fraser McKenzie - would then be
paying the loan back - that is what they promised. I had in fact been invited along to
another IT training provider who had offered pretty much the same deal and the only
difference being that I had to pay off the fees as I went along. I had to turn them
down because I was unemployed - I had no means to pay off the fees. They were
offering exactly the same as this other company but with the added bonus of not
having to pay the fees.

Waite
Because they'd be taken care of if you stuck to your contract and got a job that was
guaranteed by them?

Morgan
Yes.

Waite
But by the late spring and early summer of last year, there were signs that all may not
be well on the training course with the job guarantee scheme. Jamal Smith-Graham
completed his MCSE at the beginning of March and he went to see Fraser McKenzie
about getting that guaranteed job. Instead..

Smith-Graham
Basically I was told - read the Guardian and apply for jobs. And I said - What?
Passed the course and they're telling me to look in papers, in newspapers, and I'm like
well this is what I was doing eight months ago.

Waite
Fraser McKenzie did eventually find work for Mr Smith-Graham at the end of April -
though he didn't get his training for free, as promised, and he had to abandon his
honeymoon plans recently because of the £5,200 debt. For Rhi Morgan, halfway
through her course, a visit to the company's office had been reassuring. Getting in
touch with them afterwards, however, was less so..

Morgan
Eventually it got to the point where I'd send off an e-mail to somebody and it bounced
back a couple of days later saying - I'm very sorry I don't work for this company
anymore, please try such and such - and there'd be another two maybe e-mail
addresses for somebody within the company. I'd e-mail them and the same thing
would happen.

Waite
How were you feeling at this point?

Morgan
Uneasy. Starting to feel very uneasy.

Waite
Rhi Morgan finished her MCSE course on time, but is still unemployed, still has no
experience of working in IT, and now has to repay as much as much as £8,200.
Rajesh Chand is working part time - though not in IT and not helped by Fraser
McKenzie. The repayments on his £8,200 debt become due next month. His first
inkling that something was wrong? Attending a classroom session last August at a
business park in Birmingham.

Chand
The people at the centre they said that they were not aware of any classroom training
being booked and there were five other colleagues with me and we all a bit shocked. I
started making phone calls to all the numbers I had at Fraser McKenzie, sending e-
mails - no response at all.

Waite
Well, there was a good reason for that. A month earlier, Fraser McKenzie had ceased
trading. And its training provider PPI Learning Services had gone into administration.
The Job Guarantee Scheme was no more. But then is the so called "guarantee" of a
job ever an acceptable promise to make to people that you're trying to persuade to
enrol for expensive training courses which will push them into debt? Especially in a
deep recession? Colin Steed is chief executive of Institute of IT Training.
Steed
I don't think any company can guarantee a job and in a recession I would like to know
of a company that can guarantee a job. You've got to be very, very careful.

Waite
But in the cases we're talking about many of the students that we've heard from
completed the course, they did their side of the deal, then didn't get a job - as they'd
been promised - and didn't have their loans repaid - as they'd been promised.

Steed
That is awful, it is not acceptable in any walk of life - if you promise somebody
something and they pay you their money then they should get either the goods as
promised or they should get their money back, as you would if you went into a shop.

Waite
Could you do more as a professional body?

Steed
As a professional body we do exactly what we can, which is to accredit people and if
any of the students on any of our accredited companies have a complaint then we
have a complaints committee who will deal with it and in some cases we will make
sure that the company will pay the money back. But only people that volunteer to
become accredited do become accredited but the problem is there's no regulation.

Waite
So you think there should be?

Steed
Oh definitely, it's not a mandate that they have to sign up for our accreditation. So
anybody can start up a training company and offer courses to individuals.

Waite
So people are at real risk?

Steed
They certainly are.

Waite
And the Institute of IT Training tell us that while PPI's training was accredited for
corporate clients, its individual training was not - though in this case the job
guarantee was of course not made by them, but by Fraser McKenzie.

So what of that company, the brand "you can trust", which acts "with integrity and
honesty at all times"? How could they offer an IT job guarantee in the middle of a
recession? How did their staff - some of them on commission only - sign up trainees
to Barclays loan agreements when Fraser McKenzie had no Consumer Credit Licence
- as required by law? And most importantly, what about all those young people who
now have huge debts?
We have made repeated request to the company for an interview. Instead they sent us
a statement.

       Statement from Fraser McKenzie
       We have made every effort to honour our recruitment commitments. We also
       arranged for work experience placements to help students build up their
       commercial experience in the IT sector.

Fraser McKenzie provided "additional help" they said and financed "student
mentors". And for proof of satisfied customers, they directed us to what they insist
were documented testimonials on their blog. Where, of course, we find Jamal Smith-
Graham's glowing reference for the company, which, as we've heard, he says he never
made. The blog also contains quotes from companies which used Fraser McKenzie's
services. Again one denies ever providing such a quote and the others to us their
comments have since been retracted.

The statement went on:

       The directors had used our personal money to help keep the business afloat. If
       we had been aware of the situation from PPI Learning Services earlier on, we
       perhaps could have put a contingency plan in place.

Well when we turned to Roy Sunley, former chief executive of PPI Learning
Services, it was clear that he had no plan in place to be interviewed. "There was no
reason" his statement said. Adding that the "usual financial checks" were carried out
before they began working with Fraser McKenzie and that the financial crash and the
subsequent squeeze on credit meant that the number of approved loans went down
from 40% to 18%.

       Statement from PPI Learning Services
       This caused a dramatic drop in revenues and cash into the two companies.
       Fraser McKenzie was paying off loans and finding people jobs but then the
       financial meltdown meant a massive drop in jobs being available in the IT
       sector.

So how about the third player in this saga - Barclays Partner Finance? It has, as it
must under consumer credit law, found a new training provider so students who
haven't done so can complete the course. But as to the job guarantee loans repaid, they
were promises made by Fraser McKenzie, and as the money was paid directly to PPI
Barclays is adamant that loans will have to be paid off. But what checks, we wanted
to know, had Barclays made before handing out those hundreds of loans, why had
they lent in the first place to people who were unemployed, and why had they
accepted loans brokered by companies which don't hold a consumer credit licence,
certainly we could find no trace of one? Barclays told us:

       Statement from Barclays
       As with all of our partners, we undertake a range of checks to ensure that it's
       appropriate for them to offer our products. The details of our agreements with
       partners are of course confidential.
       Before any loan is made, all credit agreements are checked against our lending
       policy and the loan would need to be affordable. We make regular checks on
       how our products are sold by partners' sales forces and we take any allegation
       of misselling of credit extremely seriously and will always investigate if any
       complaints are made.

Ironically, in that statement we received from Fraser McKenzie, we were invited to
feel sympathy for the company.

       Statement from Fraser McKenzie
       The whole experience has been a very painful event for all concerned,
       including the directors of Fraser McKenzie. So much so we are working on
       minimum wage salaries and just trying to move on with our lives.

Try telling that to Rhi Morgan, and her young son Thomas. They're also trying to
move on with their lives but facing a multi-thousand pound debt.

Morgan
I have no income, that's not through choice, that's because I thought if I worked really
hard and got this certification - like they promised - then I would be guaranteed
employment. How am I going to cope now? I'm going to just slip further and further
into the red. At least back at square one I didn't have this huge debt hanging over my
head. At least we were struggling by but - we were managing. I feel completely let
down by every company involved here. I don't understand how they feel that they can
treat their customers this way.

								
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