Episode 6 Rip Off Britain

We ask you to tell us who's left you feeling ripped off.

I think this is very, very, very wrong, for what they've done.

The bank piles charges upon charges, upon charges, upon charges...

Legally it was right, morally...

that's where the question and doubt comes in my view.

And you contacted us in your thousands,

by post, e-mail,

even stopping us in the streets.

And the message couldn't be clearer...

You don't always get a straight answer. They try and fob you off.

Not happy at all.

There's always that very small print with a clause

you didn't realise.

We're being ripped off big-time.

'Whether it's a deliberate rip-off,

'a simple mistake, or a catch in the small print,

'we'll find out why you're out of pocket

'and what you can do about it.'

Keep asking the questions, keep... go to the top if you have to.

We do get results, I mean, that's the interesting thing.

'Your stories, your money.

'This is Rip-Off Britain.'

Hello and welcome to Rip-Off Britain,

the series in which we

work tirelessly to assist you,

the consumer, to get a fair deal

and we hope we're able to help you avoid being ripped-off, don't we?

Absolutely! You've been sending letters and e-mails asking for help,

and we've also been out and about to hear from you face-to-face.

You know, one topic that comes up time and time again,

is when you feel that paperwork, you know, contracts, bills and so on,

are not fully explained, leaving you feeling most confused.

Now, in turn, this can often lead you into making bad decisions,

and above all, costing you money.

Also coming up, the property investment that cost this man £78,000, was it a con?

I thought definitely I'd been taken down the garden path and it's a definite scam.

Prize draws promising big wins...

If he really isn't close to winning the big prize I don't think these

people should be writing him letters which make him think he is.

And we've been solving many of your problems face-to-face

at our Rip-Off Britain pop-up shop.

Buying a house is probably one of the most stressful things you can do,

and as it's also the single most expensive purchase you'll ever make,

it's vital to get things right.

A crucial piece of information when deciding whether or not to buy is the survey.

You hope it will pick up anything about the house that's not quite right,

but there's a choice of surveys you can get

and they may not always turn up everything you would expect.

Like whether your potential home is already occupied.

Meet Sally and Tim Rogers and their children,

two-year-old Evie and ten-month-old Pip.

This is their dream family home -

which they bought back in 2010.

It was really the only house that we've ever fell in love with

when we walked through the front door,

so we both walked out and went, "Yes, I think so."

And the timing couldn't have been more perfect

with the completion date falling one month before baby Pip was due to be born.

So, here we are on Friday 13th!

-First time in.

-'It was all coming together.'

We were going to get everything out for the new baby,

everything was sorted at last, it was great.

-Evie! Hello.

-'Before buying, they'd done the sensible thing'

and decided to get a survey carried out on the house.

We thought quite long and hard about what kind to go for.

We were trying to decide between the homebuyer's

and the building survey, which is a structural survey.

We took the decision to pay £600 for the homebuyer's survey,

believing it would pick up anything majorly wrong.

The survey didn't throw up any big problems they went ahead with the purchase.

I like what they've done with the curtain pole - it's beautiful!

Let's hope that Friday 13th is NOT an omen.

But those words came back to haunt Tim

when Sally noticed something.

I just had that feeling that something wasn't quite right.

There was a strange smell.

Nice bit of mould down the back of the fridge.

-Lovely.

-Any droppings?

-I'm sure there are, yes.

-Yeah, there are.

Behind where the fridge had been, there where rat droppings.

Underneath the sink, where the dishwasher had been,

there was what looked like an old bait trap and some droppings.

Then after about ten minutes, we realised there had been a problem,

even just in the kitchen area, we hadn't even been upstairs.

They contacted a local pest controller, Sean Whelan.

Immediately I could smell dead rodents and droppings

and definitely an odour of rodent activity.

We then came over and moved this floorboard here,

which exposed dead rodents, loads of flies

and also thousands of droppings.

The next area visited was this floor here

and straightaway we moved this floorboard

and under here we revealed

literally thousands and thousands of rat droppings

and again a couple of dead rodents. The rat infestation in this property

has to have been one of the worst I've ever seen.

We made the decision not to live here.

I just said, "I'm not happy to bring my children into this environment."

If this jeopardises this pregnancy at this stage,

I couldn't live with that outcome. It just wasn't an option.

'The family had to find somewhere else to live

'and fork out extra money until they had got the problem fixed.'

In the meantime, extra storage, rent.

Treating the rats had actually cost us nearly £6,000.

Now, you may be thinking,

"Hang on, they had a survey done," and they did,

but you need to be careful when it comes to surveys.

They don't always do what you think.

In fact, there are three very different types of survey

with the most basic valuation costing between £100 and £300.

The first one is not a survey at all it's the mortgage valuation,

commissioned by the mortgage company

and basically trying to work out what the market value of the property is.

The second one is a homebuyer's survey which is much more detailed

and much more structured, but again has its limitations

because it depends on what the surveyor can see on any particular day.

Then the third one is a building survey,

which is much more detailed and may involve opening stuff up,

looking more closely at potential defects and so on.

That more thorough survey probably would have uncovered the rat infestation,

but it would have cost more - up to £1,000.

Tim and Sally had gone for the middle homebuyer option at £600,

but with that one, surveyors don't move heavy furniture or carpets

to examine the property in detail.

For that reason, when Sally and Tim complained to the Ombudsman

that the company doing the survey was at fault,

their appeal was rejected.

All of which has left them wondering whether next time around, they'd choose something different.

I'd either assume the mortgage valuation was all right and just play it by ear,

or pay top notch for a full structural building survey.

Good girl. Can you show Pippa?

In September, for one weekend only, we opened up a very special pop-up shop in Manchester

so that, thanks to our team of experts, we could offer instant help to as many of you as possible.

Brenda and her husband Brian came along because of a problem they'd had with their travel insurance.

Let's start at the very beginning then, it's a very good place to start.

Booked a holiday at the beginning of the year, to travel to Morocco in May,

erm, and then in March I was diagnosed with breast cancer

so I had to cancel the holiday.

I'd bought travel insurance, as I always do,

and have never claimed before,

and when I put in my claim they said I hadn't paid an extra premium

to be covered by breast cancer so they didn't pay me back for the holiday.

And you said, "I didn't have breast cancer when I booked a holiday."

Exactly, I said, you know, I declared all that I had, which was nothing, on my original premium.

The insurance company had said, "Why didn't you cancel right at the beginning?

"You should have told us the minute you get the diagnosis,"

whereas the last thing you're thinking of is your holiday terms and conditions.

I can't believe that insurance companies,

when you could have medical advice or medical letters to say,

"She didn't know she had cancer when she booked this holiday," wouldn't accept that.

Well, sadly, the financial services industry

has a habit of trying to protect its profits

and putting the customer at the bottom of the pile.

You're one of the millions of people who end up having to fight that.

You shouldn't have to take this to the Ombudsman,

but persevere because it's free and I think you'll get your money back.

So, what would be your advice generally?

It sounds so cliched, but it really is true,

you've got to read all that small print in there before you buy it. However, something like this,

-I think you're in the right, that's the bottom line...

-As we say in the programme, be a terrier,

just keep on going because, you know, it's very easy to be fobbed off.

I'm sure you'll all be delighted to know that with the help she received from the Rip-Off Britain team,

that perseverance paid off,

Brenda has received the full £240 back from her insurance company.

Now, here's another investment that can go horribly wrong,

and has already caught out tens of thousands of people.

Believe it or not, between them they have lost

an estimated total of £200 million.

When Eric Wright retired,

he wanted to invest some of the money that he'd earned,

to make sure that his future was financially secure.

It was just more or less having a good backup as I got older -

not knowing how your health's going to be,

protecting my future was very important.

In January of 2010, Eric received a cold call from a company

called The Property Partnership, based on Bishopsgate in London

and not to be confused with other companies with similar names.

They were offering what's called a land banking deal,

and it seemed simple enough.

They'd make all the arrangements for Eric to buy a plot of land

with apparently huge development potential.

Next, they'd negotiate planning permission for housing,

and voila - his land would rocket in value,

without Eric having to do anything.

They seemed to be kosher,

and the promises were reassuring.

They made it sound so good, I couldn't refuse.

Eric bought a plot in Peckham for £5,000.

Then, he paid another £25,000 for one in King's Lynn,

which he was promised would be sold to a housing developer by Christmas.

This said this would be a good return, one of the best sites

they'd ever had. So that's why I went ahead with that.

I was looking to protect the money that I had.

I wanted to increase it, and I felt that

this would be the ideal place to put the money.

But once he'd laid out that initial £30,000,

the company kept asking for more

and more money.

Faced with persuasive salespeople

giving what SEEMED like

convincing reasons,

Eric felt he'd no choice but to pay.

And soon, he found he'd forked out

an extra £42,000.

They have a way of more or less

pressurising you and making you see their way.

And saying, you've got to act urgently -

if you don't, you could lose all the previous

money you've invested. So then you tend to say,

oh, well, it's nearly there now, we're almost at the end,

the sale will be going ahead shortly, which I was promised...

After handing over a further £6,000,

Eric was getting suspicious.

The paperwork he'd seen didn't stack up,

and every query was met with a request for more money.

The next time he was asked, he refused.

I felt, definitely I've been taken down the garden path here, and it's a definite scam.

So that was the time that I said no, I wasn't sending any more money,

and that's when I thought there was something wrong.

£78,000 down,

Eric discovered that despite what he'd been told,

the land he'd purchased had no planning permission.

As if that wasn't bad enough, we found that the ownership of the plot in King's Lynn

had never been transferred to him.

Instead, it seems he'd been sold other, smaller pieces of land around the country.

Chris Mayhew from The Insolvency Service

advises investors to be wary of schemes that seem too good to be true.

If somebody is cold called, they should really be asking themselves,

why should somebody call you out of the blue

with a fantastic scheme to sell a piece of agricultural land?

If the scheme was really that fantastic,

why are they offering it to you?

Once Eric's worst fears were confirmed,

he asked Property Partnership for his money back.

I said at the time that I wasn't happy

and I'd be looking to have my money returned.

But as of yet I've had no reply from them. Nothing.

And he's not likely to either,

because Property Partnership has gone into liquidation.

We tried to contact them, but had no response.

It seems they, along with Eric's life savings, have disappeared.

It's all right looking back and saying, "I would never have done that now.

"And I will never do it again", not now.

So I was, I would think, a bit gullible, to take in everything they told me as true.

We've heard from other viewers who've lost thousands from similar land banking schemes.

The Financial Services Authority has already investigated 130,

and warns that the companies behind them are becoming not just more aggressive,

but verging on the criminal.

But what exactly is the FSA doing to combat this?

I've come to their headquarters here at Canary Wharf to find out.

Let me put you on the spot - are there any land bank schemes that people should even consider?

Have I seen a land banking scheme that's made money for an investor? No, I haven't.

Is it always an illegal activity to sell land

that might one day get planning permission? No.

People can buy land, but we need to think

whether this is a practical and realistic prospect.

Is it likely that one day in the future, a big house builder

will buy land from you and 99 other people

who all own one of 100 plots in a field,

or are they more likely to deal with a farmer or a single salesperson?

OK, this has been going on for some years now.

Why are you not shutting them all down?

Where are the teeth of the FSA in tackling this problem?

The legislation doesn't allow us to close a scheme down

just cos somebody is selling land.

We have to prove that they're selling land to a group of people,

that they're offering to look after that land,

and they're offering to get planning permission for a group of people.

If we can prove that it's a collective-investment scheme,

we can go to court and we have gone several times

and closed down £50 million worth of land-banking schemes.

-Thank you very much.

-Thank you.

If you're one of the 444,000 people in the UK

who own a holiday timeshare, you'll be familiar with how they work.

You'll also be familiar with how tricky they are to sell on

or indeed how to end the arrangement if you no longer want it.

So when we heard from 50 customers of the same timeshare company

who all felt trapped in their contracts,

we wanted to see if there was anything we could do about it.

But what happened next surprised even us.

With nearly a million and a half customers worldwide,

Diamond Resorts International

are a major player in the timeshare market.

But Diamond Resorts are not everybody's best friend.

We were contacted by 50 British customers

of Diamond International, and they all said the same thing -

that their experience of the company falls short of the glossy ads.

We can't identify any of the people we spoke to, and you'll see why,

but with the help of our researchers Ben,

we can tell you what did happen.

Diamond Resorts is a name we've heard of a lot on this series.

We've had a number of e-mails about them.

So we looked into them to see what the complaints were about.

Most of the people we heard from were initially pleased

with their holiday investment.

..That's great.

But for some, this diamond lost its sparkle.

Like most timeshare schemes these days,

rather than buying into just one property,

Diamond's customers gain access to a whole range of exclusive resorts,

by buying points for cash.

The people we heard from

were spending significant amounts of money on these points.

Anywhere from a couple of thousand pounds up to £30,000-£40,000.

So, it is a lot of money that we're talking about.

With points came the prizes of luxury holidays around the world,

but there's more money to shell out.

Diamond customers pay annual maintenance fees

for the upkeep of the resorts,

and the amount they're charged is determined by the points they have.

That's where the trouble really starts.

When members signed up, they'd agreed that their management fees

would increase in line with the retail price index - between 2%-4%.

But we've heard of increases significantly larger than that.

That's leaving people upset.

Our maintenance started up at about £600.

It's now £1,850 a year, which is absolutely crazy.

Our management fees were £1,450, now they're £2,800.

With the annual fees alone now costing more

than an entire holiday from a travel agent,

the members we heard from decided enough was enough.

They wanted out of their contracts,

even if it meant writing off the thousands of pounds

they'd spent on points.

But Diamond were having none of it.

When they contacted Diamond to cancel the contracts,

they were directed to the small print and realised they were trapped.

The terms and conditions allow just four circumstances

under which Diamond customers can cancel.

The first is the least attractive - death.

And even then, if you have family, it's implied the contract passes on.

The second is bankruptcy.

You can also cancel if you're over 75,

although again only if you've no transferable family members,

or if you have medical problems that stop you from travelling.

So, is such a restrictive contract fair?

We need a lawyer.

People are buying into a membership of a company.

Through the contract, there are some interesting points in there,

you can resign from being a member. But even if you do that,

your liability to pay for things lasts beyond that date.

There's a right for the company to sell points on to other people,

but they don't have to do that. It's important you consider it carefully

and look at what you're signing up to.

Unhappy at being locked into the contract,

some customers simply stopped paying the escalating fees.

As we usually do, we filmed interviews

with a range of unhappy customers.

So you may wonder why you're not seeing them on the screen.

Well, after we contacted the company to get their comments on this,

there was something of an unexpected development.

We gave Diamond resorts a list of unhappy customers,

and suddenly, they all received a letter from the company.

It said that they would be freed from their contracts

on one condition - they couldn't talk to the media about it.

And of course, that includes us.

So we aren't using any interviews we filmed,

and we won't be calling the people who initially contacted us

because if they speak to us again, they could be in big trouble.

I've dealt with lots of confidentiality clauses of the years

and negotiated them back and forth.

This one is unusual in that it requires them,

if they breech the confidentiality, to pay £10,000.

It's essentially saying, "We will go to court and claim this £10,000

"for each and every breech."

It seems to me to be a deterrent

in terms of trying to stop people speaking to the media.

Diamond Resorts told us they have...

..and their bills come with explanations of significant changes

which are often due to...

Such as, in Europe, a sharp drop in the exchange rate.

They say the people we heard from bought their membership...

But they stress that membership is a...

and if any member stops paying, it's an...

These members didn't meet the criteria for cancelling,

but the company decided that it's in those individuals' interests to...

Even though it does mean writing off the cash they'd spent on points.

There you have it. For these customers at least,

Diamond's no-escape policy is no more,

so we thought their story is definitely worth telling.

And it goes to show that persistence really pays off,

and we're happy if we've helped a little bit along the way.

Now, there can't be too many of us who haven't, at some point,

received letters in the post promising to win big cash prizes,

in return for signing up for something

or taking out a subscription.

But what are the chances of actually winning?

Here's one Rip-Off viewer

who's been waiting for his prize for quite some time.

More than just one of Britain's best-known magazines,

Reader's Digest is something of an institution.

It was first published in the UK in 1938

and soon established itself as a family magazine,

and a trusted brand.

One big fan is Roy,

an 87-year-old war veteran and Military-Cross holder.

He's been a subscriber of the magazine for years,

but also loves its regular book offers.

I decided I would buy books from Reader's Digest,

and build up a reasonable library of interesting books

which I hope will benefit my children

and also my grandchildren in due course.

But when Roy orders his books,

he also receives letters from the company

offering him a chance to take part in regular prize draws.

They send a catalogue of the books then they say,

if you choose one or two books out of the selection,

you'll be entered for a prize that might be worth £10,000-£15,000.

Roy's daughter Anne says the language used in the letters

has left her father convinced that the more books he buys

the better his chance of winning a prize.

And in the last five years,

she's estimated that he's spent around £2,000.

Some of the letters make it plain

that he doesn't have to say "yes" to win a prize,

But then they say, if you do say "yes", there'll be a bonus for you.

"To claim your £30,000 opportunity,

"simply browse though the enclosed catalogue now."

Then it says, "To order one or more products

"and ensure your opportunity to win the £30,000 customer-reward prize,

"return your completed joint confirmation certificate."

If that doesn't sound like you've got to buy something to win a prize,

I don't know what does, frankly.

Having been told that he's down to the final stages in one draw,

Roy's convinced that the £100,000 could soon be coming his way.

In fact, he's so hopeful, he's asked us not to use his surname

to make sure that his chances won't be scuppered.

I don't know the number of people in the draw,

But I'm assuming it's two or three in the final stages.

You don't get a letter from the Liaison Officer for Winners

unless there is something in the offing.

So I interpret that accordingly.

If he really isn't close to winning the big prize,

I don't think these people should be writing him letters

which make him think that he is. I think that's wrong.

Chances are those letters are going to more people than Roy realises.

And Anne believes if customers like her dad

knew their real chances of winning,

they'd feel differently about the draws.

Suppose they said, "When you enter this draw, your chance of winning

"Is going to be about one in 10,000."

How would you feel about that? What would you think?

Not very enthusiastic about it.

-Probably not bother.

-I probably wouldn't bother.

Reader's Digest does state in the small print

that you don't need to buy anything to take part in the prize draws.

But Anne believes they should make this much clearer.

People who are of an age where if they receive

an official-looking letter from a company they trust,

would take the contents at face value.

'..I really like that one.'

And won't be, like younger people might be,

a little more sceptical about the contents.

Reader's Digest told Rip-Off Britain that Roy is a valued customer.

And while any competition has an element of...

..it's...

And while their draws...

They'll take Anne's concerns into account

when reviewing how they contact customers.

Do remember, with any sort of unsolicited mail,

though they may phrase things as though they're your best friend,

they're usually only after your cash.

Don't be persuaded to hand it over,

unless it's for something that you are sure you really want.

Baffled by your bills?

I thought, "This cannot be true. It's totally unacceptable."

I was so angry!

Trying to wade through never-ending small print

that leaves you totally confused?

I might've been stupid for not reading it,

or I've read it and not took it in.

I could kick myself, I really could.

You can write to us at...

..or send us an e-mail.

The Rip-Off team is always looking for the stories that matter to you.

I have to say, and I don't know how you two feel about this,

but as far as I'm concerned,

it's been clear from the stories we've heard

and the amount of letters and e-mails you've sent us,

that when a company doesn't clearly explain their procedures,

their contracts, their bills and so on,

-then you can easily end up losing out. Don't you think?

-Absolutely.

We always say on this show,

make sure you go through your paperwork with a fine-tooth comb.

And if in doubt, always get it checked out.

I agree with you implicitly. Never be afraid to seek assistance,

it could end up saving you a huge amount of money.

Next time, we'll be tackling more of your stories.

Until then, thank you for your company and from all of us, bye-bye.

-Bye-bye.

-Bye.

A Rip-Off Britain report in December

featured an investment product sold by a Hampshire-based company,

Integrity Financial Solutions, which is now in liquidation.

We'd like to point out that that company has no connection

with other businesses trading under similar names.

Subtitles by Red Bee Media Ltd