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MONEY BOX


Presenter: PAUL LEWIS


TRANSMISSION: 1st DECEMBER 2012 12.00-12.30 RADIO 4



LEWIS: Hello. Another wine investment firm goes into administration leaving
thousands of people worrying how much of their £50 million they’ll get back.
Carmageddon - that’s what people are calling December 21st. How much more will
young women have to pay to drive when new rules ban insurers for discriminating on
grounds of sex? Is it worth paying 39 pence in the pound to get a tax refund when you
could do the work yourself and keep all the money? And new rules should make
bargain airfares clearer from today, but will they?


But we start with that wine investment story. People who invested thousands of
pounds in wine are facing an anxious wait after the collapse of another wine
investment firm. Vinance PLC managed more than £50 million for thousands of
investors in the UK and abroad. In April, we reported that more than 50 wine
investment firms had gone out of business in the last 4 years costing investors an
estimated £100 million. Bob Howard’s here. Bob, another one?


HOWARD: Yes Paul. In April we reported on the collapse of a firm called Bordeaux
UK Limited. When it went down, creditors were owed £10.5 million, but its assets
were just 2 million. Now, just over 6 months later, Vinance PLC has also gone under.
The firm was founded 5 years ago and was based in Greenwich in East London.
Recently investors have been telling Money Box they’ve been having problems
getting their wines sold. Vinance charged investors a hefty upfront fee, part of which
                                           1
was supposed to cover the cost of selling. But when the wine market cooled, the firm
ran into problems. It’s now in the hands of the administrators Herron Fisher. Nicky
Fisher from the firm describes what she believes happened on the evidence she’s seen
so far.


FISHER: The company were charging 25% upfront to store the wine and insure the
wine and to allow for the selling costs. And whilst it was in a rising market that
worked; and as soon as the markets went a bit flat, the clients were selling stock but
the company was buying that stock and then not being able to sell it on and then not
having the funds to buy what the clients had ordered. And that obviously caused cash
flow problems and has caused the collapse of the company.


HOWARD: Alan invested in 2009 following a friend’s recommendation, putting in
some of his pension lump sum. Most customers agreed for Vinance to store the wine
they’d bought in the firm’s account at a bonded warehouse, but this year Alan became
worried about the firm and transferred three cases out of Vinance PLC’s account into
a private account he set up. This meant he had complete control of the wine should
anything happen to Vinance. But Alan is still unsure of the whereabouts of thousands
of pounds worth of his wine because he was still awaiting documentation for two
other cases he had bought when the firm went under.


ALAN: I think initially the company seemed to be a very valid company. It had a
good track record. But in hindsight, I would have made sure that after each purchase
that I had the documentation and would have transferred it immediately into a private
account.


HOWARD: Alan at least had some of his wine in his own separate account. Last year
Laura invested around £15,000 through Vinance PLC. When I spoke to her this week,
and after she had been contacted by the administrators, she believed getting hold of
her wine would be straightforward.



                                            2
LAURA: I know exactly where it is. I could get in a car and go and get it, I suppose.
That’s at least what I’m trying to find out. They have told me that once they’ve
established who’s got what stock where, which I guess is what you have to do, that
actually I could do that.


HOWARD: However, when we contacted the bonded warehouse where Laura’s wine
is stored, run by the firm Octavian, it couldn’t immediately match any wine to her
name. That suggests it might be stored in Vinance’s account and matching the wine
may take some time, or in some cases may not even be possible. And ultimately the
administrators are only saying they are “hopeful” that creditors will be repaid about
half of what they’re owed.


LEWIS: And Bob, what’s Vinance said?


HOWARD: Well we invited the former directors of Vinance to speak to the
programme through former director Simon Ford. They declined, but offered us a very
long statement that they insisted we read in full or not at all. We offered to read part
of it and they agreed to this as long as we agreed to some new conditions. We said we
couldn’t agree to those conditions, so we can’t read out any of the statement.


LEWIS: Oh I see. You’ve seen this statement though, Bob. What’s in it? I mean do
the former directors of Vinance apologise or express regret?


HOWARD: They don’t, Paul. It’s not that kind of statement. There are a lot of
figures showing how successful the company was and a little bit explaining what went
wrong.


LEWIS: Thanks for that, Bob. Well with me is Jim Budd, a freelance journalist who
watches the drinks investment industry. Jim Budd, why do so many wine investment
firms go out of business leaving investors with these big losses?



                                            3
BUDD: Some of them go out of business because they’re just straightforwardly badly
managed. There are also, unfortunately, some companies that actually never buy the
wine and are set up to defraud their customers. I mean I should make it clear that
that’s not the case for all companies, of course, but there are a significant number that
…


LEWIS: Yes and it’s perfectly possible … I mean any business can go out of
business and you know it is a difficult business, as I’m sure you’d agree.


BUDD: But I mean there are companies like the Bordeaux Wine trading company
that the directors were found guilty of fraud who never bought anything.


LEWIS: Sure, there have been some of those, I know. Now what are the warning
signs? If people really want to risk their money by putting it into this kind of
investment, what are the warning signs they should look out for?


BUDD: Well I think the first warning sign is very clear - is if you get cold called. The
FSA are very clear on their advice on cold calling.


LEWIS: So an unsolicited call …


BUDD: Cold calling - an unsolicited call to a stranger.


LEWIS: Inviting you to put your money in.


BUDD: Yeah, yeah.


LEWIS: Okay well stay with us, Jim. But with us also is Peter Shakeshaft. He’s
Chief Executive of wine investment firm Vin-x. And this week Peter joined with three
other firms to launch the Wine Investment Association. Peter Shakeshaft, do you need
this association because your industry has such a poor record?
                                            4
SHAKESHAFT: Well we do obviously need the association. I think that it’s a crying
shame that it’s taken up until now, some 20 years after it became fashionable to get
into wine investment, for an initiative like this to take hold.


LEWIS: Well there was another organisation, wasn’t there? I spoke to them - the
Wine and Spirits Trade Association.


SHAKESHAFT: Well we’ve been in consultation with the Wine and Spirits Trade
Association and they do a fantastic job. This isn’t in competition with them. This is
more about … They’re a lobbying group in essence …


LEWIS: (over) And do you need it because of the poor record - you know 50 firms
out of business, hundreds of millions of pounds lost?


SHAKESHAFT: Well to be clear, more people are coming towards wine investment
because it offers average double digit growth over the last 50 years. I think there was
a big article about the Queen’s reign saying it was the best investment.


LEWIS: Yes, but the past is no guide to the future, is it, as we know?


SHAKESHAFT: I was just going to say that. Absolutely.


LEWIS: Can I just ask you one more question if we go back to it? Would Vinance
have been able to join your association?


SHAKESHAFT: No. And interestingly I actually went down to …


LEWIS: Why not?


SHAKESHAFT: Well I actually went down to the offices of Vinance last week and
immediately looked at their systems, and straightaway it was apparent on those
                                             5
systems that not all the clients had the wine allocated to them under what we call a
rotation number.


LEWIS: Right. And so you would do that investigation for any wine investment firm
that was going to join your association?


SHAKESHAFT: I think clearly … I mean Vin-x, we’ve been doing …


LEWIS: Well would you? Would you do it?


SHAKESHAFT: Clearly for the last two years Vin-x have been getting independent
auditors to come and check our wine stocks; and we are insisting that this under the
Wine Investment Association guidance, that this is going to be the case, and it’s going
to be carried out by Mazars, not by us.


LEWIS: Jim Budd, will this new association help clean up the industry? It’s got a
poor record.


BUDD: Firstly, I mean I welcome the initiative. I welcome an initiative that’s going
to make sure that people get their wine and have title. I think the initiative has to go a
lot further before it can be fully credible and get the confidence of investors. I think
that cold calling ought to be banned; it ought to be that something they ban. At the
moment they’re saying well we can still call strangers under certain conditions. That
is not in line with the FSA, and if you’re setting up an investment association then I
think you have to be in line with the FSA.


LEWIS: Sure, sure. So what about that, Peter Shakeshaft? We know that a great
many people who’ve lost money have been cold called. In fact the ones we had earlier
weren’t cold called, but a lot of other people have. Shouldn’t you just ban it? Why
don’t you just say no?


                                             6
SHAKESHAFT: Well Paul, I think that’s a really interesting question and the matter
of the Wine Investment Association is that we’ve released the consultation documents
and I’m inviting Jim and others that are interested to consult with us, to find out the
best route forward. And that clearly …


LEWIS: Well we know what Jim’s view is.


SHAKESHAFT: Absolutely.


LEWIS: Will you consider banning cold calling?


SHAKESHAFT: We will not rule anything out or anything in. What we need to do is
take a straw poll of what the industry thinks and others think.


LEWIS: Well obviously the industry would like it and I mean you’ve got two, three,
four, five paragraphs here about it and you know you say that it’s a legitimate way of
marketing.


SHAKESHAFT: Well I think cold calling, we’re talking about high pressure selling
in my opinion, but cold calling, I think we rule out a sale on the first call. If you’re
introducing a brochure as a legitimate way of getting individuals interested in wine
investment, that’s one thing and I think that’s what we have to take into consideration.


LEWIS: So you say it would be. Can I just ask you about one of your employees,
Darren Lansdown. He was censured by the FSA in February 2010 for misconduct at a
stockbroker’s called Wills and Co. He is now an employee of yours at Vin-x.


SHAKESHAFT: Yes he is.


LEWIS: Is it sensible to have someone who’s been censured for breaching the basic
principles of treating customers fairly and giving them information which is clear, fair
                                             7
and not misleading, selling wine?


SHAKESHAFT: Well I’m not here to defend Darren, but I will say …


LEWIS: No, but he’s with your company.


SHAKESHAFT: Yeah and I’ve known him for 14 years and I find him a very decent
fellow. But the important matter here is it’s about what we do about this association.
It isn’t about any individual. It is about how …


LEWIS: Well it’s about how you run your business and how you run yours, and
you’ve got somebody there who’s been censured for breaching Principle 6 and 7 of
the FSA rules.


SHAKESHAFT: Well clearly for me, it is about making sure the regulation in the
wine industry becomes absolute, and the industry for the last 20 years has done
nothing about it. Because myself, Hugo Rose, David Jackson and Adrian Lannigan
have put our heads above the parapet, we’re ready and happy to have it shot off, but
the fact of the matter is that we shouldn’t get away from the fact that the industry has
let itself go for 20 years. The reason I’m on your show today, Paul, is not about
employees of mine. It’s about cleaning up the act of this industry.


LEWIS: Yes. Jim Budd, finally, will this work? Just in a couple of words because
we’re running out of time.


BUDD: Yes, if they tighten it up very considerably, and that includes coming into line
with the distant selling regulations.


LEWIS: Okay and that’s something that no doubt you’ll talk to them about and Peter
Shakeshaft will consider. Thank you both very much, Jim Budd and Peter Shakeshaft.


                                            8
Now Carmageddon. It happens on December 21st. You can’t avoid it because from
that date insurance companies will not be allowed to discriminate between men and
women for car insurance premiums. That’s to comply with a European Court ruling.
Some industry watchers predict that car insurance for young women could rise by as
much as 40% in some cases. Graeme Trudgill from the British Insurance Brokers’
Association told me why younger females will be hit the most.


TRUDGILL: The average claim for an 18 year old female is about £2,700, but for an
18 year old male it’s about £4,400. So the females have benefited from cheaper
premiums because they’ve been a lower risk, but that’s not going to be allowed to
happen anymore and that’s why they’re losing that discount and they’re going to be
paying rates the same as the men, which are more expensive.


LEWIS: So are we facing a sort of Carmageddon of confusion as far as insurance and
gender equality is concerned?


TRUDGILL: It’s early days at the moment, so not every insurance company has
made the changes to the rates, so that’s why it’s important to look around, get your
insurance broker to look at different insurance companies because some are making
big changes, some are making small changes, and some haven’t changed at all yet.


LEWIS: So younger women will see a rise. What about middle aged women? How is
it going to affect them?


TRUDGILL: The middle aged women, we’ve had a look at those. There’s very small
changes, only a few per cent difference, so it won’t be anything near as significant as
the changes for the young females.


LEWIS: If a young woman has a policy at the moment and it’s due for renewal after
these changes start on the 21st December, is it worth her trying to cancel it, as people
have been recommending, and take out a new one now so that she doesn’t pay a lot

                                            9
more in January or February?


TRUDGILL: Well we’re very concerned about that recommendation because there
are often penalties, financial penalties if you cancel a policy mid-term. Also if you’ve
had a claim, you probably won’t get any refund at all on the remaining period, and
also you won’t earn that year’s no claims bonus. So please speak to your broker and
get them to explain that and to check will you be penalised or is it best to stay where
you are.


LEWIS: If people follow your advice and they keep their policy and then at the end
of December or in January or February it’s up for renewal and they see it’s going up
by a huge amount, what can they do to try and keep that under control and keep it
affordable in some cases?


TRUDGILL: It depends on how much excess you have, what you use the car for, if
you can restrict your mileage. If you don’t do many miles, you can get good discounts
for that. They use your credit rating these days, so can you improve your credit
rating? They look at your behaviour; they have telematics boxes which can monitor
your behaviour. And the car you drive has a massive influence on your premium. You
could halve the premium depending on what car you drive.


LEWIS: One listener’s commented to me this morning that his car insurance
premium has just come through - I think it’s him and his partner who are on the
insurance - and it’s doubled, his premium; and when he questioned it with the
insurance company, they blamed the gender ruling, he says. So what can people do if
their insurers appear to be blaming this for what he thinks is a rather unnecessary
increase in his premium?


TRUDGILL: I think that the best advice is you know don’t put up with it; that if
someone doubles your premium, the chances of them holding onto you the following
year are very low indeed.

                                           10
LEWIS: Especially for Money Box listeners, I’m sure. Graeme Trudgill from the
British Insurance Brokers’ Association.


Now anyone who’s paid too much tax would like to get it back, but is it worth paying
a firm nearly 40% of any tax they recover for you? That’s the offer from the Tax
Refund Company. It’s dealt with more than 200,000 claims this year, helped by
endorsements from unions, retailers and public bodies. Ben Carter’s been looking into
it.


CARTER: That’s right, Paul. Last year HMRC admitted that up to 6 million people
had paid £2.5 billion too much through the Pay As You Earn, PAYE system, over a 5
year period from 2003 to 2008. Reclaiming overpaid tax can be done at no cost
directly through HMRC, but only if you realise you’ve paid too much, which isn’t
always easy to work out. Some companies, like the Tax Refund Company, will do it
for you, and it has arrangements to promote its service with some of the biggest
unions such as Unison and Unite as well as Marks and Spencer and John Lewis.


LEWIS: Thanks for that, Ben. So why should people pay for something they can do
themselves for nothing? The Tax Refund Company’s managing partner is David
Malik- Davies.


MALIK-DAVIES: The Revenue’s job is very much to collect tax and they will
provide answers to the questions you give, but if you don’t know what questions to
ask then obviously you’re not going to get the answers you need.


LEWIS: But if you look at your tax code, you might think well that doesn’t look
right, I don’t really understand it. Can’t you just ring the Revenue and get the
Revenue to explain it to you; and if there is a mistake, it will materialise at that point?


MALIK-DAVIES: Well if you did that, all it would be looking at is your current tax
code; it wouldn’t be going back over previous years. And obviously you have to look

                                            11
at the last 4 years plus the current year because you’re entitled to claim back as far as
4 years.


DAVIS: But if you look at things like clothing allowances, other flat rate allowances,
those are all set out by the Revenue and people can do it themselves. I’ve written
articles myself about it. Why aren’t people just given information and let them do it
themselves, which most people would be perfectly capable of doing?


MALIK-DAVIES: Well the information is there. It’s out in the public domain. If you
go on the Revenue’s website, you will find this information. But the reality is that
most people either don’t want to do it directly or they don’t feel capable of doing it. I
mean some of the organisations we work with, which are trade unions and
professional bodies, have allowances for their members and they have publicised
those allowances and told their members for many years that they can claim this
relief; but the reality is when we work with them that they haven’t claimed it and
we’re going back over the previous years where they’ve been told it was available and
they’ve not gone to the Revenue to get it.


LEWIS: But you charge people 39% of what you recover for something that they
could do themselves, many people could do themselves. Why do you charge so
much?


MALIK-DAVIES: The reason we charge the fee is because we have no minimum
fee. So the way we’ve structured our service is very much that we can offer it to
anybody irrespective of their likelihood of getting a tax refund or how much they’re
due to get back, and by having no minimum fee it allows us to secure refunds for as
little as £2 or £3 if that’s what’s needed.


LEWIS: David Malik-Davies. So why does one of our biggest unions, Unison,
advertise a company that charges its often low paid members nearly 40 pence in the
pound of any money recovered? Maureen Le Marinel is Unison’s Head of Services to

                                              12
Members.


LE MARINEL: Our committee some time ago produced a guidance sheet and
published articles for members explaining how they can undertake the work
themselves and what allowances that they may be able to claim, but the responses to
these surveys were that the majority of our members wanted us to provide a service
that would do it for them.


LEWIS: Why should people pay 39% of the money they get back? I mean your
members are generally fairly low paid, many of them, and yet you’re saying it’s right
that they pay 39 pence in the pound of money that’s recovered to this commercial
company.


LE MARINEL: The 39% was agreed so that the service could be offered to members
on a no refund and no fee basis. This is very important to our members, especially our
low paid members who can’t afford to pay a fixed fee in advance or take out the
financial risk of paying a fee when they’ve got no refund due.


LEWIS: You recently signed a 5 year contract with the Tax Refund Company.


LE MARINEL: We have.


LEWIS: What benefit does Unison get from that?


LE MARINEL: We don’t get any benefit from it at all. Unison do not get any
commission from this service.


LEWIS: So why do you have a contract with them then?


LE MARINEL: We have a contract with them, so that they will provide the service
to our members. They also offer to, if a member realises or they realise that a member
                                          13
owes the Inland Revenue money, they offer that service completely free, and therefore
you know the service that they’re offering is a valuable one.


LEWIS: Maureen Le Marinel. Adrian Houston used to be a tax inspector. Now he’s a
director of Belfast accountants Houston and Company. Were these charges justified?


HOUSTON: It’s really money for old rope. It’s just a matter of saying what’s the tax
year, what did you earn from your different sources of income, pension, pay and did
you have any savings, and stick it in the computer. Is there a refund? Yes. Right well
we’ll write to the Revenue. It’s pretty easy stuff.


LEWIS: And easy enough for people to do themselves?


HOUSTON: Absolutely. It only gets complicated if they’ve maybe had two, three,
four jobs in the year. But equally all they need to do is write down what their jobs
were, write to the Revenue and say would you please check my tax. And they will do
it. A tip for people who are in nice, friendly organisations with a wages clerk is nip
along to your wages clerk and say, “Would you just have a look? Does that look okay
to you?” Or “I’ve go at pension as well. Does that code look okay?” The wages clerk
won’t be able to sort it out for you, they’re not authorised by HMRC to talk about
your affairs, but they might say, “Hmn, that does look a bit odd. Give the tax office a
ring.” And that’s a wee bit of free advice that’s available. But looking at your P60, my
experience is that if people think their tax is wrong, it very often is.


LEWIS: That’s accountant Adrian Houston.


If you’ve ever tried booking a flight and think you’ve got a great deal only to find at
the end of the lengthy booking process that extra charges have been slapped on for a
debit card payment or something else, then help may be at hand. From today airlines
will have to include any charges for debit cards in the headline price at the beginning
of the booking process as well as charges for anything else that you can’t avoid. Bob

                                             14
Atkinson from Travelsupermarket.com is here. Bob, good news for travellers. Just tell
us how this has all come about?


ATKINSON: Well basically it started with a Which? super complaint in April of last
year looking at the entire industry charging not just for flights but for a range of
products for charges on debit and credit card charges. The OFT ruling came out to say
that in particular with airlines, they wanted to cease pretty much as soon as possible
any form of charging when you pay by a debit card, so they can’t now slap an extra
fee on if you choose to do that. And if you choose to pay by credit card, what they
have said is that airlines at that first point when you do your search, you get your
quote, it should be indicative straightaway; that if there’s going to be an extra charge
for credit cards you can see it, and the price you see there is the price which includes
any charges whatsoever and nothing extra for debit.


LEWIS: Now one of the major or the major probably cut price airline companies,
Ryanair, has said it isn’t good news for customers. They’ve accused the OFT of what
they call “meddling” and they’ve introduced this extra 2% surcharge for paying by
credit card, which they blame on the OFT.


ATKINSON: Well up until two days ago, they were charging everybody £6 per
person each way for payment by debit or credit cards. You could get round it by
having a Ryanair prepaid Mastercard, which if you’re a very savvy traveller and a
frequent traveller was a fairly good deal, but for most people it wasn’t. So in order to
comply with the legislation, they have now changed it, so that you still pay the £6 per
person fee however you now pay, but that’s included with that headline fare.


LEWIS: So instead of surprising you right at the end, it’s in the headline fare they
advertise?


ATKINSON: It’s there straightaway.



                                            15
LEWIS: But there is this 2% charge for credit cards. That’s a new charge they told
me last night.


ATKINSON: Yes, for Ryanair it is a new charge. They didn’t differentiate before
between debit and credit cards. However, this now actually brings them into line with
most other airlines who do charge you extra for a credit card.


LEWIS: Yes I think Easyjet 2.5% and BA has a £4.50 fee per person charge.


ATKINSON: They have a flat fee. It varies, but it’s around that amount, Paul.


LEWIS: Yes. Now we’ve had an email from a listener. Karen said she recently tried
to pay for a flight with a debit card, but she couldn’t. Credit card was the only option,
so she had to pay the extra fee. And not all of us have a few hundred pounds in our
current account, we rely on credit cards, so it is a compulsory charge well for people
who have to pay by credit card.


ATKINSON: Well if you don’t have the money in your account or you don’t have a
debit card at all, which most people will have one, then of course yes you are paying
extra, but the airlines do have to provide that “free” alternative to comply with the
regulation. But always compare every single price that you’re looking at.


LEWIS: And easier to do that now they all do the same. Bob Atkinson from
Travelsupermarket.com, thanks very much. And Bob’s here. Bob, some emails about
wine investment coming in.


HOWARD: Yes, Paul. Stephen from London said, ‘I work in the wine industry and
hold strong views about wine sold as so-called investments. It’s not an investment;
there’s no intrinsic value in wine. It’s speculation in the most primitive sense.’ And
Frances from Malvern said she was cold called by Vinance PLC, the firm which has
collapsed. She said, ‘I never invested, but they just didn’t take no for an answer. In the

                                           16
end, I was blatantly rude.’ (Lewis laughs) Yeah that seems to have worked. And Mike
emailed regarding car insurance. He said on the programme it was said that women’s
car insurance premiums would have to rise to the level of men’s, but surely if there’s
an end to sex based discrimination both women’s and men’s premiums should
converge?


LEWIS: Well that’s the theory, but we’ll have to see what they do. Thanks very
much for that, Bob. That’s just about it. Can I just say, if you’re worried about the
price of Christmas postage and you’re on certain benefits, you can get cheaper stamps
this Christmas. There’s full details in my newsletter or in a link in my newsletter. It’s
the Chancellor’s Autumn Statement on Wednesday. I’ll be at a Wedgwood factory in
Stoke-on-Trent as part of the BBC’s coverage. Money Box Live with me and Ruth
Alexander. We’ll take your questions on the Autumn Statement on Wednesday. I’m
back with Money Box next weekend. Lots more on our website. Today reporters Ben
Carter and Bob Howard, producer Emma Rippon. I’m Paul Lewis.




                                            17

				
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