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MONEY BOX


Presenter: PAUL LEWIS


TRANSMISSION: 1st JUNE 2013 12.00-12.30               RADIO 4



LEWIS: Hello. In today’s programme, clone wars: criminals are copying entire
websites of registered financial advisers and using these clones to persuade people to
invest their money in dodgy schemes before making off with it. People signing up for
money off vouchers after shopping online with well-known high streets brands tell us
they didn’t realise they were committing themselves to a £10 a month payment. And
the triplet who was refused a mortgage because of her sister’s credit record.


But first, fraudsters are fooling investors by copying the websites of registered
financial advisers, using them to sell fraudulent share deals and then making off with
their money. This so-called “cloning” con was used to fool people more than fifty
times in 2012, and the Financial Conduct Authority warned this month it’s seeing an
increasing number of cloned sites. Chris is a chartered financial planner. He emailed
Money Box after discovering his firm and its entire website had been cloned by
crooks, and a very good job they’d done.


CHRIS: We’re based in Richmond in Surrey and the telephone numbers were
Richmond in Yorkshire. So I sort of thought that was quite clever in some ways - that
if someone was checking where the telephone dialling codes related to, that it would
be Richmond, and they’d used our Richmond address. The domain name was slightly
different, but again using our company name. I joked with some people that actually
their website was more convincing than ours and contained more detail than ours. The
                                            1
amount of effort that had gone into it was really quite shocking.


LEWIS: And you say the one difference was they had their own phone number. What
happened when that was rung?


CHRIS: Someone answered the phone pretending to be me.


LEWIS: In your name?


CHRIS: Yes. I mean it’s just incredible that you know they would go to that extent to
pretend to be someone from the genuine firm.


LEWIS: And what kind of investments were they offering people?


CHRIS: Shares in companies like Apple and Google. From what we’re led to believe
it’s a boiler room scam and they would send through fake certificates, so that
someone would give them their money and they wouldn’t actually get anything back.


LEWIS: When you realised all this, Chris, what did you do?


CHRIS: Literally within hours there was a warning on the regulator’s website saying
this is a fake firm, please watch out. I’d asked then, “Okay, well what’s next? Do I go
to the police?” I think that’s when I became really quite shocked again that there
wasn’t a process whereby I could report that fake website to a body and have it taken
down.


LEWIS: Financial adviser Chris. Well in the end he spent thousands of pounds
moving offices, renaming, rebranding his firm and building an entirely new website.
He hopes he’s broken any links between him and the fraudsters. Another Money Box
listener, who we’re calling John, was fooled by a cloned site. He saw what he thought
was an advert for a reputable financial advice firm on the internet. He emailed them,
                                           2
they made contact, and he initially invested £1,000.


JOHN: They sent me the information of what the deal would be and I checked it out
on the website and you know it looked fine, so I committed myself to doing that and
the process involved me transferring money from my bank account to their nominated
bank account. I didn’t get a share certificate. What I got is a certificate from their
compliance people detailing the transaction and the time it took place, etcetera.


LEWIS: And these shares were in a well-known company, were they?


JOHN: Yeah they’re blue chip companies by and large.


LEWIS: That was £1,000. What happened next?


JOHN: Subsequent to that, I invested more money. And then my final trade was for a
pre-IPO initial public share offering for Formula One. It was quite a significant
amount of money altogether. That amounted to £120,000.


LEWIS: When did you begin to think this might not be what it seemed?


JOHN: I couldn’t get hold of them. I got kind of a false message on the line, which
was I think with someone in Spain, somewhere in Spain. Then subsequently I did get
hold of them and they actually asked me for some more money. I just explained there
and then that you know “I’ve got no more money”, I couldn’t do anything, so they
needed to get my money back. And that was the last conversation I had with them.


LEWIS: Do you think there was anything you could have done at any stage
differently or was there a warning note that perhaps you should have spotted?


JOHN: This whole thing was very plausible. The actual operation was extremely
slick, the website was amazing. I had my own kind of client account number. I could
                                             3
access it you know remotely and things like that, so I could see all those things. I tried
to verify every transaction I was doing as being legitimate. There were warnings
subsequently that I saw on the FSA website, but you don’t kind of tend to look on the
FSA website for those kind of warnings that a company’s kind of cloned or something
like that.


LEWIS: Well how easy it is to lose your life savings. John contacted the police, but
apart from giving him a crime number he’s heard nothing from them. Julian Ellis is a
chartered financial planner and a compliance expert. I played him John’s tale and
asked how people can protect themselves against these plausible frauds.


ELLIS: Well my first alarm would be they know nothing about me. I contacted them
or John contacted them by email and they come back and they say we’ve got
something for you. How do they know that?


LEWIS: So no proper fact find as you would get from a proper financial adviser?


ELLIS: Absolutely. And that’s vital that a customer is given the right advice, and for
that to occur the firm would have to find out about that customer.


LEWIS: And then he got what we presume were documents they just printed
themselves saying yes you’ve got shares in company x and company y. How easy is it
for people to know if documents of that nature are in fact what you should get?


ELLIS: Well it’s quite difficult to know, particularly as nowadays quite often they
don’t receive documents at all.


LEWIS: What about other people who may be listening who either have just had an
approach or are just thinking of doing something? What are the essential checks that
people should make?


                                            4
ELLIS: Well the starting point is to go and see the Financial Conduct Authority’s
website at www.fca.org.uk. Up on the right-hand side at the top is the Financial
Service’s Register. There you can look and search for the company and you can find
an awful lot about that company from just that site: the contact details, the names of
individuals who are authorised to give advice or to speak to customers, and you can
even find the history of those individuals. So if you get approached out of the blue,
you can even check and say to the person well where did you work before because
that information is on the website.


LEWIS: And it also has a section on client money. What should you look for there?


ELLIS: If the firm is authorised to handle client money and assets, then you can hand
your money over and it should be safe, but we know from the past that this has not
always been the case. If the firm is not authorised to handle client money, then a
cheque or a transfer should not go directly to that firm.


LEWIS: Where should it go?


ELLIS: It should go to the provider of the investment.


LEWIS: Assuming of course that you believe the investment itself is a correct and
honest one?


ELLIS: Absolutely. I mean you do have to carry out your checks of the intermediary
- the person who’s putting you into that investment vehicle - before you transfer
money.


LEWIS: On a sort of broader level, John transferred money into bank accounts -
admittedly outside the UK - but those accounts can be traced and presumably the
individuals behind them can be traced. Why do you think the police here seem so
reluctant to pursue these individuals who I mean they’ve conned John out of

                                            5
£120,000. It was a very slick operation. I presume they’ve conned a lot of other
people as well.


ELLIS: It is quite complex and these organisations are global now and it does make it
very difficult to trace money and follow it through, particularly where you’ve got
regimes that don’t authorise or regulate financial services to the same extent that we
do.


LEWIS: Julian Ellis. And we didn’t get much further with the fraud authorities. We
asked the police organisation Action Fraud, the regulator, the FCA, and Financial
Fraud UK for interviews. They all said no. But you can look at their websites through
links on our website: bbc.co.uk/moneybox. And I must say do take care, there are
clever fraudsters out there.


Now when you buy things online beware if you’re offered a discount voucher off your
next purchase. Accepting that offer may lead you to another website altogether and
that can be expensive. Money Box listener Richard says he unwittingly signed up to
the same deal twice after booking tickets both for an exhibition and then a train
journey.


RICHARD: To my shame, they took nearly £500 off me and then I kicked myself for
being duped. But I actually blame Ticket Master and thetrainline.com for exposing
their customers. For them it’s customer service suicide. So my advice is be very, very
wary because a £30 train ticket can end up costing you £500 like it did me.


LEWIS: Well Lynne also emailed Money Box. She lives in Cheshire. She noticed a
mystery £10 payment taken off her bank statement to a company called Complete
Savings. When she tracked the company down, she was told she had signed up to
their shopper discount programme after she booked a flight with Ryanair. Lynne
remembers booking the flight, but nothing about Complete Savings.



                                           6
LYNNE: At the time all I was trying to do was just navigate myself out of the site
because I’d made my booking, that’s all I wanted. I wasn’t aware at all that I had
signed up to anything. I mean it’s not a huge amount of money, but you know £10
every month mounts up. But the other thing is if you’ve got a trial period, well I’ve
had nothing from that company to say your trial period is now up and now we will be
taking £10 every month from your account.


LEWIS: And another listener, Victoria, told us she’d had £60 taken from her bank
account after trying to buy a book online from WH Smith. She remembers a pop-up
on the website asking if she wanted a £10 discount voucher. She clicked ‘yes’, as I
suppose most of us would, but she didn’t realise she was joining the Complete
Savings Programme.


VICTORIA: You click on all these websites and accept their terms and conditions
and of course I hadn’t read them. So my fault for not reading it, but I do think it was a
con. Why are WH Smith doing something like that to their customers? You should be
completely upfront with your customers as to what you’re doing and they weren’t
being.


LEWIS: Well after some argument Victoria and Richard did get their money back.
Complete Savings and Shopper Discounts and Rewards are both run by Web Loyalty.
It refused to do an interview with Money Box, but sent us a statement.


WEB LOYALTY STATEMENT: We have thousands of satisfied customers who
use the programmes to save money on their everyday online shopping. People are
offered a 30 day free trial which allows them to try it out and (if they like it) can
remain a member for £10 a month. The monthly fee is clearly referenced throughout
our communications; on the online signup page, it is mentioned six times. A customer
must manually enter their name, email, postal address and credit or debit card details,
and they also need to create and verify a password.



                                             7
LEWIS: The firm also says that when the free trial is coming to an end, it warns
customers they’re about to be billed; and customers, it says, can cancel at any time.
Trainline.com, Ticket Master, Ryanair and WH Smith are all paid for the adverts on
their sites, but they all told us they think that’s a benefit to offer what they say is a
popular service to customers. Some firms though have pulled out, including B&Q,
which apologised to its customers who had been “inconvenienced” by using the site. I
asked Guy Anker, News Editor at Moneysavingexpert.com, how people buying online
can avoid these problems.


ANKER: The real message for consumers or shoppers out there is when you’re
making a transaction and you get to the confirmation page, be very wary of anything
that says free trial, 10% off your next purchase, because invariably you’re signing up
to something again which is going to cost you money.


LEWIS: But you say you’re signing up - and certainly that’s the view of some of our
listeners - but when we looked at the web pages and what the company says to us is
by ticking that box all you do is go to another page which is from the voucher
company or whoever it is and then you do have to enter all your details again,
including your credit or debit card. So you seem to be making some conscious choice
to join rather than just ticking a box and finding you’ve joined.


ANKER: And also it is often stated, albeit in the small print, exactly what’s going on.
But the messaging, the initial messaging often says free trial, 10% off, £10 off,
whatever, so it’s making people think they’re getting something and maybe the
messaging isn’t clear enough that what they’re actually doing is signing up to a
subscription service.


LEWIS: And assuming you do read it and you do know what you’re doing and you
do consciously sign up, are these deals worth having?


ANKER: Well there is absolutely no point paying to get vouchers. You can very

                                              8
easily get vouchers online for free.


LEWIS: We heard from those listeners that they really blamed the big brand, the
well-known brand, whether it’s WH Smith or Trainline or Ryanair.


ANKER: Big brands have to be very, very careful about what they’re doing because
brand loyalty’s important and if people feel they’re being duped, that’s a big problem.


LEWIS: So what do you think should happen with this to try and control it, to make
things better for consumers?


ANKER: To be clear, I mean no-one’s breaking the law by doing this, but I would
argue the spirit of the law is being stretched to you know the absolute nth degree.
What should happen, I think consumers and shoppers really need to take care of what
exactly they’re doing after a purchase. I mean shopping online is great - there’s so
many discounts to be had, it’s quick - but this is a mini health check and people just
need to be absolutely aware of what they’re signing up to, which means reading the
small print.


LEWIS: Guy Anker. And of course checking your bank and credit card statements
for any unknown debits. Well with me is Tammy Goriely, a lawyer at the Law
Commission, which advises the Government on changes to the law. Tammy Goriely,
clearly many people don’t quite understand what they’re signing up for. Should it be
made clearer?


GORIELY: Well every day we sign that we’ve read and understood the terms and
conditions. That is in fact the biggest lie on the internet. The only way of getting
through life is to tick and hope for the best. In fact the law recognises this and for
many years the law intervenes to say if you sign up to a really unfair term, then you
are not bound by it, and the regulators - the Office of Fair Trading, Trading Standards
- can intervene. The problem is that that unfair terms law isn’t quite working at the

                                             9
moment. The law says that the court shouldn’t look at whether it’s a good bargain,
they shouldn’t examine the adequacy of the price.


LEWIS: But in this case people didn’t even seem to know from their accounts that
they were signing up to a monthly payment. They thought they were just filling in
their details to complete the process and get their £10 or £15 discount voucher.


GORIELY: It’s very cleverly done because the words ‘£10 off’ are in big red letters,
the word ‘free’ is in block capitals, and at the very end of a long block of text is the
‘pay £10 a month’. And clearly that is on the limits of legality and people aren’t
getting the message that they’re going to pay for it.


LEWIS: Yes, it is there five times. I mean I must just put that point from the
companies. But what would you propose? What change do you think should be made?


GORIELY: Well the difficulty is that there’s a lot of uncertainty about how far
regulators can intervene when there’s an unfair price term. The whole thing came to a
head about bank charges and it culminated in the decision of the Supreme Court that
however unfair and unreasonable unauthorised bank charges were, the court shouldn’t
look at it.


LEWIS: But it’s not the amount of the price. It’s more the fact whether the term is
fair or not. It’s a technical term that you’re using there, isn’t it?


GORIELY: Yes.


LEWIS: So do you think there should be a change? For example, should there be a
box saying ‘I agree to pay £10 a month for this service’ or something like that?


GORIELY: Well what we’re suggesting is the court should be able to look at it and
the Office of Fair Trading and Trading Standards should be able to intervene unless
                                              10
the term is both transparent and prominent. Prominent is clearly a question of fact and
you have to look at it in the circumstances. You have to say what would a good
consumer have done given these circumstances.


LEWIS: And briefly, you want this change. There is a Consumer Bill planned by the
Government. Could it be in that?


GORIELY: Yes, we hope so. We hope this change will be made because there are a
lot of hidden price terms and people are quite often duped by them.


LEWIS: Tammy Goriely from the Law Commission, thanks very much.


Now it seemed a good idea back in 1988 when Money Box listener Linda decided to
give all her newborn triplets a name beginning with K. Kimberley, Kirsty and Kelly
were born within a few minutes of each other and spent the next 20 or so years
sharing the family home with mum and dad. But today these three young women with
the same surname, initial, date of birth and address are finding problems with
separating their identity, as I discovered earlier this week. (Approaching house) So
I’ve come to Burton-on-Trent to meet the three Ms K. Richardson’s and see if I can
tell them apart. (knocks on door) Hello, I’m Paul Lewis.


LINDA: Hi Paul. I’m Linda. Come on in.


LEWIS: Can I meet your daughters?


LINDA: You can, yes. Right girls, this is Paul. This is Kelly.


LEWIS: Hello Kelly.


KELLY: Hello.


                                          11
LINDA: Kirsty.


KIRSTY: Hiya.


LINDA: And Kimberley.


KIMBERLEY: Hello Paul.


LEWIS: Hello. I can certainly tell them apart. So, Kelly, when this really came to a
head was when you and your fiance tried to get a mortgage. Tell me what happened.


KELLY: Got to a position where we were ready to look to buy, so we were all
excited and we went to get a mortgage, to sort one out. And we were declined. And
my immediate thought was oh my god, what have we been doing wrong when we’d
been so careful and so responsible with our money, with our outgoings that we
thought there wouldn’t be an issue. I remembered an issue that we had previously
regarding Kirsty being my alias.


LEWIS: And how did you come to be an alias?


KIRSTY: It was shop storecards. They just assumed that we were one person
obviously with our initials being the same, date of birth, like our address - everything
really.


LEWIS: And why did that stop you getting credit because you’d been careful?


KELLY: Because I’d all Kirsty’s credit history, so I had every single storecard, every
single credit. Everything Kirsty would have taken out in the past was on mine.


LEWIS: And Kirsty, was that not quite the picture they wanted to see when they lent
someone money? Was your credit record not that good?
                                           12
KIRSTY: Well (laughs) it’s only been the last year really, having a bit of an
overdraft that has been my downfall. But other than that, it has been alright. But I
think it includes everything though, even phone contracts and everything. It all adds
up to one score, doesn’t it? And Before Kim was obviously married and moved out,
hers was on both of ours as well. So all three of us was on each other’s, if that makes
sense, so it was even worse then.


LEWIS: Kimberly, you’ve been sitting there very quiet. Have you had problems of
identity, being confused with your two sisters?


KIMBERLEY: Well actually, yes. When I worked at McDonald’s - it was Kelly who
found out after working there for 2 years that all of my contributions with national
insurance and tax had been paid into her name instead of mine. So I hadn’t actually
paid any. And then when we got it all sorted out, I got a nice big rebate cheque.


LEWIS: And who was that made out to? Miss K. Richardson? (laughter) So do you
sometimes think why did our mum call us …


KELLY: (over)Yes, definitely. It’s mum’s fault. (laughter)


LEWIS: So, Kelly, what would you like to see happen? What changes would you like
in the way the system works?


KELLY: There should be more checks done to prevent this type of thing from
happening. Obviously they’ve got to look out for themselves, identity fraud and
everything like that, but just to assume that two people are the same, it’s not right, do
you know what I mean?


LEWIS: Did you get a bit cross with them?


KELLY: I did, I did. They kind of just apologised and they kind of said they could
                                            13
see that we were two different people and they’ll get that removed within 5 working
days. So that was on the Thursday and by the following Thursday she was off my
credit report.


LEWIS: Was that a big relief?


KELLY: (laughing) Yeah went down and applied again because I think we were just
really looking forward to getting that house.


LEWIS: Kelly of the Richardson triplets. Well with me is Neil Munroe, a director of
the credit reference agency Equifax. Neil Munroe, an individual case but many people
do share names, initials, addresses, even dates of birth. How do you manage to sort
them out?


MUNROE: Well we do our best to sort them out by looking at all the pieces of
information. We try and look at the full name - obviously the first name, middle
names and date of births - but the problem we do have of course is there is no unique
identifier for any of us in the UK. So for us, it’s a matter of trying to take data from
many, many different sources, which can be supplied in different formats, and try and
make sure that’s all created into one credit record.


LEWIS: But even if people do give their full name - because of course these young
women had different first names and different middle names - even if you give all that
information, you can sometimes be referenced just as Ms. K. Richardson, as they
often were, can’t you?


MUNROE: You can do. And what we try to do and they are encouraged to do in fact
as part of the changes in the way that data is processed, back in 1998, there was a
requirement to capture the full name and to capture the date of birth to try and prevent
this happening, so that obviously we can do our best to make sure a credit file only
reflects what is relating to that individual.

                                                14
LEWIS: Yes, I mean I’ve had tweets from people. ‘I’ve got identity confusion with a
chap in Scotland who has the same name and date of birth’, says Workshopshed. Asif
says he was sent his brother’s details when he asked for his report. And somebody
who calls himself Fedupfish - ‘My mother-in-law has the same initial as me and she
was sent my report.’ So it is a problem that has to be resolved in some way. Now you
said there isn’t a unique identifier, but we all have a national insurance number, don’t
we?


MUNROE: Well we do, but we’re not allowed to use that, and that’s under the terms
in which the national insurance numbers are created. So we are where we are with
taking the information we do. We spend an awful lot of time and money, all the credit
reference agencies, in building algorithms to try and make sure that we do match it,
but obviously we need to be aware that this is a world where there is fraud and there
are identity issues and people do use aliases. I noticed in your interview there was an
alias created there.


LEWIS: Yes Kelly and Kirsty were assumed to be one person …


MUNROE: Indeed.


LEWIS: … and they put a little alias flag, and it was getting that off that freed up the
mortgage application.


MUNROE: Indeed.


LEWIS: And how do people tell you if things have gone wrong? I must say I looked
at your website and the other credit reference agencies. You’re very keen to sell us
our report, but you don’t tell us oh it’s really important to tell us if there’s a problem;
this is how you do it.


MUNROE: Well we’re investing an awful lot of time over the last few years in

                                             15
making sure that people are aware of how they can raise a dispute. Obviously we do
suggest they get a copy of their credit report first and there are various options for that
from a statutory price up to higher value services. But obviously irrespective of where
you got your report from, you have the right free of charge to come to us and dispute
the information. We’re well aware that obviously credit reports are extremely
important these days in getting the finance you need, so we are reviewing that.


LEWIS: Neil Munroe of Equifax, thanks. And there’s links to the websites of
Experian and Equifax. And the page to send your complaints to: our website,
bbc.co.uk/moneybox.


And just time to say it’s been a bad week for the payday loan industry, which is now
worth an estimated £2 billion a year. Highly critical reports were published this week
from Citizens Advice and the House of Commons Public Accounts Committee. They
accused the industry of ignoring promises to treat customers fairly and worse in some
cases. To answer these and other critics, the Consumer Finance Association which
represents eight big lenders has set up the Short-term Lending Compliance Board to
strengthen the code of practice it imposes. And next Wednesday, 5th June, the
Consumer Finance Association and critics of payday lenders will be with me on
Money Box Live to answer your questions here on Radio Four at 3 o’clock. But that’s
it for today. Links, as I said, on our website: bbc.co.uk/moneybox. Emails already
coming in. One lady says she lost £1300 to one of those discount schemes. Hope she
got it back. You can also email your questions on payday loans for Money Box Live.
I’m back next weekend with Money Box. Today the producer was Emma Rippon. I’m
Paul Lewis.




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