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EnergyElderly warned over bogus schemes
Filed under: Scams & Fraud
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Older people are being warned not to fall prey to bogus retail and investment schemes, after 78 rogue companies raking in more than £28 million from people were shut down in the last three years alone.
The companies scammed almost 2,000 investors between them and the oldest victim was aged 92, according to the Insolvency Service, which wound the firms up.
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The service has joined forces with charities to warn older people and their friends and family about the scams, amid fears that this age group is being targeted by "callous" conmen.
Forty-nine of the companies wound up sold plots of land for building that did not exist or were on protected green belt land; four sold wine stocks that did not yield any profits, and nineteen sold other forms of investment. Six sold retail products that were either unsuitable or at highly-inflated prices, including burglar alarms, mobility scooters, "heritage" coins and stair-lifts, the Insolvency Service said.
In one case, the Insolvency Service found that a mobility scooter was sold to an 80-year-old customer who had had both legs amputated, despite guidelines stating that the product was suitable for someone who had difficulty walking but had use of both legs. In the case of another company, a family invested £600,000 in a land banking scheme but it later turned out that plots of land had been mis-sold, the Service said.
Issuing their warning on World Elder Abuse Awareness Day, campaigners said these scams often use high-pressure tactics or sell products at grossly inflated prices and conmen would cold call older people and refuse to hang up until they have closed a sale.
Robert Burns, head of investigation and enforcement for the Insolvency Service said: "We have observed a number of companies targeting older people in recent months. These scams are particularly unpleasant because they target the most susceptible members of society, older people who may be unsure how to seek advice or afraid to say no."
Mr Burns said if people have any doubts they should take time to research the company and seek out some independent advice.
Michelle Mitchell, charity director general at Age UK, urged people not to feel embarrassed to report a crime to the police and said they should also tell their friends and relatives.
Business Minister Norman Lamb backed the warning, saying: "These scams are especially bad as they target some of the most vulnerable members in our society. Older people have grown up trusting other people. To take advantage of this trust, and then exploit it is both manipulative and deceitful."
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Retirement Tips & Tools
Fight back - latest on scams
Forty-nine of the companies wound up sold plots of land for building that did not exist or were on protected green belt land; four sold wine stocks that did not yield any profits, and nineteen sold other forms of investment. Six sold retail products that were either unsuitable or at highly-inflated prices, including burglar alarms, mobility scooters, "heritage" coins and stair-lifts, the Insolvency Service said.
In one case, the Insolvency Service found that a mobility scooter was sold to an 80-year-old customer who had had both legs amputated, despite guidelines stating that the product was suitable for someone who had difficulty walking but had use of both legs. In the case of another company, a family invested £600,000 in a land banking scheme but it later turned out that plots of land had been mis-sold, the Service said.
Issuing their warning on World Elder Abuse Awareness Day, campaigners said these scams often use high-pressure tactics or sell products at grossly inflated prices and conmen would cold call older people and refuse to hang up until they have closed a sale.
Robert Burns, head of investigation and enforcement for the Insolvency Service said: "We have observed a number of companies targeting older people in recent months. These scams are particularly unpleasant because they target the most susceptible members of society, older people who may be unsure how to seek advice or afraid to say no."
Mr Burns said if people have any doubts they should take time to research the company and seek out some independent advice.
Michelle Mitchell, charity director general at Age UK, urged people not to feel embarrassed to report a crime to the police and said they should also tell their friends and relatives.
Business Minister Norman Lamb backed the warning, saying: "These scams are especially bad as they target some of the most vulnerable members in our society. Older people have grown up trusting other people. To take advantage of this trust, and then exploit it is both manipulative and deceitful."
10 of the biggest consumer rip-offs
- 1. Mobile data roaming charges<p> <span style="text-align: left; ">Using a mobile phone to make and receive calls, send texts and browse the web while abroad can be extremely costly – especially if you are travelling outside the European Union (EU), where calls can cost up to 10 times as much as at home.</span></p> <div> </div> <div> To avoid high charges, Carphone Warehouse suggests tourists ensure a data cap is in place, use applications to check data usage, turn off 'data roaming', avoid data-intensive applications such as Google Maps and YouTube and use wi-fi spots to update social networking sites.</div>
- 2. PPI<p> <span style="text-align: left; ">Payment Protection Insurance (PPI) is supposed to help people to continue meeting their loan, mortgage or credit card repayments if they fall ill or lose their jobs. However, policies are often over-priced, riddled with exclusions and sold to people who could not make a claim if they needed to.</span></p> <div> </div> <div> At one point, sale of this cover - which was often included automatically in loan repayments - was estimated to boost the banks' profits by up to £5 billion a year.</div> <div> </div> <div> Now, though, consumers who were mis-sold PPI can fight back by complaining to the bank or lender concerned and taking their case to the Financial Ombudsman Service (08000 234567) should the response prove unsatisfactory.</div>
- 3. The Lottery<p> It could be you, but let's face it, it probably won't be. In fact, buying a ticket for the Lotto only gives you a 1 in 13.9 million chance of winning the jackpot.</p> <div> </div> <div> With odds like that, you would almost certainly be better off hanging on to your cash and saving it in a high-interest account.</div>
- 4. Budget airlines<p> No-frills airlines such as EasyJet may promote rock-bottom prices on their websites. But the overall fare you pay can be surprisingly high once extras such as luggage and credit card payment fees have been added - a process known as drip pricing.</p> <div> </div> <div> Taking one piece of hold baggage on a return EasyJet flight, for example, adds close to £20 to the cost of your flight, while paying by credit card increases the price by a further £10.</div> <div> </div> <div> It may therefore be worth comparing the total cost with that of a flight with a standard airline such as British Airways.</div>
- 5. Credit card cash withdrawals<p> Cash advances, which include cash withdrawals, are generally charged at a much higher rate of interest than standard purchases.</p> <div> </div> <div> While the average credit card interest rate is around 17%, a typical cash withdrawal of £500, for example, is charged at more than 26%.</div> <div> </div> <div> What's more, as the interest accrues from the date of the transaction, rather than the next payment date, costs will mount up even if you clear your balance in full with your next payment.</div>
- 6. Supermarket 'deals'<p> Supermarkets such as Tesco and Asda often run promotions under which you can, for example, get three products for the price of two.</p> <div> </div> <div> However, it is only worth taking advantage of these deals if you will actually use the products. Otherwise, you are simply buying for the sake of it, which is a waste of your hard-earned cash.</div> <div> </div> <div> To avoid paying over the odds, it is also worth checking the price per kilo to ensure that larger <a href="http://money.aol.co.uk/2012/05/24/supermarkets-slammed-for-multi-buy-rip-offs/">'economy' packs really are cheaper</a> than the smaller versions.</div>
- 7. Train fares<p> Buy a train ticket at the station on the day of travel and the price is likely to give you a shock - especially if you are travelling a long distance at a busy time of day.</p> <div> </div> <div> However, <a href="http://money.aol.co.uk/2012/03/13/how-to-cut-the-cost-of-your-commute/">you can cut the cost of train travel</a> by 50% or more by going online and making the purchase beforehand - especially if you book 12 weeks in advance, which is when the cheapest tickets are on sale.</div> <div> </div> <div> Other ways to reduce the price you pay include avoiding peak times and taking advantage of so-called carnet tickets, which allow you to buy, for example, 12 journeys for the price of 10.</div>
- 8. Packaged current accounts<p> Most High Street banks offer packaged accounts that come with monthly fees ranging from £6.50 up to as much as £40, with a typical account charging about £15 per month.</p> <div> </div> <div> Various benefits, such as travel insurance and mobile phone insurance, are offered in return for this fee. But whether or not it is worth paying for them depends on your individual circumstances.</div> <div> </div> <div> Before signing up, it is therefore essential to <a href="http://money.aol.co.uk/2012/01/14/maximise-your-current-account/">check that you will make use of enough of the benefits</a>, and that you cannot get them for less elsewhere.</div>
- 9. Overseas withdrawals/card payments<p> Overseas money transfers or travel money purchases attract the same high rate of interest as credit card cash withdrawals.</p> <div> </div> <div> Worse still, most credit cards – and debit cards – also charge you a foreign loading fee if you use them to make purchases while abroad.</div> <div> </div> <div> You can, however, <a href="http://money.aol.co.uk/2012/02/17/how-to-avoid-overseas-bank-fees/">avoid these charges</a> by using a Saga Platinum or Nationwide Building Society credit card.</div>
- 10. Premium rate phone lines<p> Numbers starting 0871 cost 10p or more from a landline, while those starting 09 can cost more than £1 a minute <a href="http://money.aol.co.uk/2012/03/21/call-0800-0808-and-0870-numbers-for-free-from-your-mobile/">from a mobile phone</a>.</p> <div> </div> <div> And the operators of these high-cost phone lines, some of which are banks, often get a cut of the call charges.</div> <div> </div> <div> Most 09 numbers are linked to scams and should therefore be avoided at all costs, while 0871 numbers can often be bypassed by searching for an alternative local rate numbers on the saynoto0870.com.</div>
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