THIS TRANSCRIPT WAS TYPED FROM A RECORDING AND NOT COPIED FROM AN ORIGINAL SCRIPT. BECAUSE OF THE RISK OF MISHEARING AND THE DIFFICULTY IN SOME CASES OF IDENTIFYING INDIVIDUAL SPEAKERS THE BBC CANNOT VOUCH FOR ITS COMPLETE ACCURACY. 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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