Episode 14 Rip Off Britain

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Episode 14

Angela Rippon, Gloria Hunniford and Julia Somerville travel the country tackling sharp practices affecting consumers and investigating rip-offs and concerns both big and small.

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left you feeling ripped off. think it is very wrong, what they


have done. The bank piles on charges and charges. Legally it was


right, but morally, that is where the Dow it is. You contacted us in


your thousands, by post and e-mail, stopping us in the street. I do not


always get a straight answer, they just fob you off. We are being


ripped off, big time. Whether it is a deliberate rip-off, as simple


mistake or a catch in the small print, we will find out why you are


out of pocket and what you can do about it. Keep asking the questions,


go to the top if you have to. stories, your money, this is Rip


Off Britain. Welcome to Rip Off Britain where once again we have


been investigating your stories, hearing who has left you feeling


ripped off for how you have fallen foul of sharp practices.


The financial pressures that households have experienced during


the downturn caused 1.2 million of you to abandon saving into your


pensions. Some of you have looked elsewhere to secure your future but


with devastating effects. Today we will hear how some of you


have ended up losing tens of thousands of pounds thanks to


opportunities that turned out to be different to the ones you thought


you had signed up to. In one case, the company responsible appears to


have vanished completely. Later today we will be


investigating how this man stands to lose �9,000 after an investment


did not go to plan. I have spent a lot of money and I have ended up


with absolutely nothing. And how a promise of profits from owning land


has had devastating consequences. We found out that they had not


applied for planning permission and they had effectively made off with


a lot of money. We set up our very own Pol Pot Shop where you came men


and told us your consumer concerns. Some of the stories we will hear


today are to do with putting your money into some sort of property or


land, whether it is at home or abroad. An increasingly popular


choice in this country is what is called a part home. These are


bungalows style mobile homes usually sit on private estates


where the lure of a picturesque location has convinced thousands to


sell up and take the plunge. But they are not regulated in the same


way as traditional homes and some owners have found themselves drawn


into lengthy battles with the part's management.


The John Gilmore has lived here since 1978. With the beautiful


countryside on his doorstep and the strong sense of community spirit in


the area, he expected this to be his final move. He opted to buy


what is commonly called a part home. He purchased the property but not


the land it sits on. I thought, this is a nice place, I can see my


gaze out here. When we moved here, everyone had their own fence and


that was it. This is the hanging baskets and the flowers and the


decking that I had. Four years after moving in, lie for John


changed. The brand new owners took over the site. It was not long


before they started to make changes. My place was parallel to the road.


He wanted to widen the road. Not only that, he wanted me to 90


degrees so I was in line with all the others, which they did. In the


process, John's porch and decking were demolished and rebuilding them


would cost �9,000, so he asked the company to foot the bill, but they


refused. John was astounded. It has been spoilt by the way we have been


treated. We asked the owners to comment on the way John was treated,


and the owners said that when he purchased a site it was run down


and in breach of its licence. He said he explained to the residents


what needed to be done to rectify breaches, including moving some


homes. He said he would not be responsible for moving unauthorised


extensions, and said that John was fully aware this included his porch


and the deck. But John fought back into Kay's case to court. John was


told to take down a shed that did not have proper permission, but the


company was ordered to pay for John's damage property and a legal


costs as well. John has still not received all of his money. The site


corners appeal be caught's decision and successfully. They still have


to pay the outstanding fees. I will not do any remedial work at my own


expense. As the number of people buying into this lifestyle


increases, so do the problems. This woman is on the road gathering


information from people like John. It is typical of what is happening,


pretty widespread. Does the part have a residents' association?


This woman has sent her findings to MPs in the hope that they will do


more to protect residents' right. This is a move that one trading


standards officer would welcome. Owners can increase their rounds


year-on-year if the part was kept up to the standard that it was when


people into their contracts, they are entitled to increase the fee


each year by the rate of RPI, but the problems come when parks are


neglected and the facilities and then delighted use. Residential


property tribunals came into force two naked easier and cheaper to


settle disputes, but even now, the onus remains on residents to


instigate any legal action. I would not advise anybody in the current


climate to buy a part home because even if you are certain that the


part home site operator is absolutely splendid, how do you


know whether he or she is going to have to sell up? How do you know


who will buy the site? Meanwhile, the owner of John's site says that


with the help of residents they hoped to bring this place in line


with the standard of the rest of their parts. But until that happens,


John feels that his dream retirement home has become anything


but. I cannot sell the place in its present condition. This is not a


place we are proud to living. I used to be able to invite people in,


but you're ashamed of the place now. If you're one of the 444,000 people


in the UK who owned a holiday timeshare, you have got to be


familiar with how they work. You may also be familiar with how


tricky they can be to sell on, to end the arrangement if you no


longer wanted, so when our programme heard from 50 complaints


-- 50 customers of the same company all felt trapped in their contrite,


we wanted to see if we could do anything about it, but what


happened next surprised even us. Diamond Resorts International are


one of the major players in the timeshare market. But Diamond


Resorts International is not everybody's best friend. At Rip Off


Britain we were contacted by fitted -- 50 British customers of Diamond


Resorts International and they are all saying the same thing, that


their experience falls short of the glossy standards of the adverts. We


cannot identify any of the people we spoke to, and you will see why


in a moment, but with the help of one of our research team, we can


show you this. We have had lots of it -- lots of e-mails about the


company so we decided to look into them. Most of the people we spoke


to were initially pleased with their holiday investment, but for


some, this Diamond lost its sparkle. Like most timeshare schemes these


days, rather than buying into one property, customers of Diamond


Resorts International had access to a range of exclusive resorts.


People were spending money on points, anywhere from a couple of


1,000 pounds, to hundreds of thousands of pounds. With points


came the prices of luxury holidays around the world, but there is more


money to shell out. Diamond Resorts International customers pay annual


maintenance fees for the upkeep of the resort and the amount they are


charged is determined by the amount of points they have. That is where


the trouble starts. When they signed up they agreed that their


management fees would increase with the retail price index, but we have


been hearing about increases significantly larger than that. Our


and maintenance started off at only �100, it is now more than 1,000.


Her management fees were 1004 funded and 50, now they are 2,800.


With annual fees now costing more than an entire holiday from a


travel agent, the members we heard from decided enough was enough.


They wanted out if their contracts even though it meant writing off


the thousands be spent on points, but Diamond Resorts International


were having none of it. When the colt to cancel the contract they


were directed to the small print and they realised that they were


trapped. The terms and conditions allied only four circumstances


under which customers can cancel, first, the least attractive, death.


The second, bankruptcy. You can also cancel if you're over 75, but


only if you have no transferable family members. Or if you have


medical problems which stop you from travelling. Is such a


restrictive contract fair. We need a lawyer. Through the contract


there are some interesting points. You can resign from being a member


but even if you do that, your liability to pay for things last be


on that date. There is a right for the company to sell the points to


other people if they wish, but they do not have to do that. It is


important that you look at what you are signing up to. I'm happy at the


contract, some of the customers stop paying the escalating fees. We


have filmed interviews with a whole range of those unhappy customers so


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


because after we contacted the company to get their comments there


was something of an unexpected development. We gave Diamond


Resorts International a list of unhappy customers and suddenly they


all received at a letter from the company. It said that they would be


freed from their contract under one condition, they could not speak to


the media about it. So we're not using the entry views we film,


because it seems as if the people speak to us again, they could be in


big trouble. I have seen that with lots of confidentiality clauses


over the years. This one is unusual because it requires them to pay


�10,000 if they breach the confidentiality. They are saying


they will go to court and claimed �10,000 if they breached the


contract. It seems to be a deterrent in terms of stopping


people speaking to the media. Customers may not be allowed to


speak, up bat at Rip Off Britain we do not like to keep good news to


ourselves. These members will be delighted to be free of their


contract even though it does mean writing of the cash they have spent


on points. Diamond Resorts International told us they have


thousands of satisfied members and their maintenance bills come with a


their maintenance bills come with a full explanation of any significant


change, which were often due to factors outside their control, for


example, a sharp drop in the exchange rate in Europe. They


stressed that membership is a long- term commitment and if members stop


paying it impacts on everyone else. But the stress that they allow


members to cancel under certain circumstances and they have decided


that it is in the interests of the individuals we heard from to except


the cancellation of their the cancellation of their


membership. For these customers at least, Diamond Resorts


International's rigid no escape policy is no more. It goes to show


that persistence pays off and we're very happy if we have helped along


the way. Henry is an independent property


expert. He has some advice on how to invest in property safely.


Although the market is much tougher as a result of the recent financial


crisis, there are opportunities out there for the clever financial


investor. One of the problem with Property Investment Clubs is they


provide a one stop shop for property, where they provide a


source of properties to buy, the finance to date and a management


service for when you have purchased it. These three all in house should


ring alarm bells in many potential investors' mind. The current


financial climate makes it much harder to find the funds and borrow


the money in the first place to buy a property to lack, but it also


throws up massive opportunities with distressed bales and people in


difficult circumstances. -- a Big companies don't always make


things easy to understand. It can be confusing trying to work out why


you haven't ended up with what you expected. If you feel bogged down,


we have put together a booklet of advice. You can find a link to the


free guide on our website. Or, to receive a copy in the post, send an


envelope to the address we will give you at the end of the


programme. The Here's another investment that


can go horribly wrong and has already caught out thousands of


people. Between them they have lost an estimated total of �200 million.


After buying plots of land that turned out to be worthless. This


has prompted the Land Registry to warn the public of the risks of


buying land as part of a Land Banking scheme. Were you are sold a


plot of land which is claimed to have a good investment value


because it is ripe for development. All too often it turns out there is


a fat chance of that tournament ever happening which you will only


discover when you have handed over the cash.


Adrian Jones from wigan macro ran a successful chemical company for 24


years. When he retired he was hoping to enjoy the rewards of that.


My plan for the future was really to enjoy my retirement. And,


hopefully, to leave our children some inheritance. Age and have some


money to invest so when he got a brochure from a company promising


big returns, he was interested. tight and see your returns


maximised. It looked simple enough, Land Banking UK would make all the


arrangements for you to buy a plot of land. They would negotiate


planning permission for housing, and your land increases in value


without you having to do anything. The sales pitch was, once planning


permission had been gained, they would sell the land to a developer.


They expected a tenfold increase in the value of our investment.


Decided he could expect big money in the future, Adrian bought three


plots, investing �35,000. Once planning permission had been gained,


they would be sold to a developer, and we would receive about 60% of


any but left in value of the land, the other amount would go to the


company which was the incentive to make it work. Their promise was to


try, try again, until they obtained planning permission. So hopefully,


within a short number of years, the investment would come to fruition.


Land Banking UK is one of many companies selling land this way,


promising rich rewards further down the line when the site is developed.


But the Insolvency Service to investigate companies operating


against the public interest has seen too often people fall foul of


them. They are called called by persistent sales people who say


they have plots of land for sale without planning permission -- cold


called. People are duped into paying inflated prices. That is


what happened to a gin. We had bought a worthless piece of land.


The company never applied for planning permission. In 2007 we


found the company had gone into interim administration. In April


2008, we found out from the liquidator that the company had in


fact been wound up. Far from making a profit, age and had nothing to


show for his �35,000. One might think a tenfold increase was too


good to be true. It was. As a result, I suppose you could say I


was a little gullible, more than a little gullible. The thing people


should be asking themselves is why should somebody call you out of the


blue with a fantastic scheme to sell a piece of agricultural land,


because if the scheme was that fantastic, why are they offering it


to you? Chris from Worcester also took up one of these fantastic


looking schemes from land bank UK - - Land Banking UK. We purchased two


plots of land and we were told the return would be up to seven times


out investment, we were looking at �140,000 return on our investment.


Chris was horrified to discover Land Banking UK had gone into


administration. So there would be no planning permission and no


return on his investment. We were very distressed we have invested


our money and we had been cheated by Land Banking UK. We have found


that they hadn't actually applied for planning permission, they had


effectively made off with our money. The Financial Services Authority


calls Land Banking UK -- this kind of scheme paid �200 billion the


year problem. I feel there are not enough


safeguards to protect the consumer from people who are out to actually


extorts money from you. A �35,000 investment is never an easy matter


to write-off. And, that is why we continue to try to fight, and get


some satisfaction for investors, and that is why we will continue to


fight until it is resolved. We won't give up on this.


It is cases like this that have prompted the Land Registry to


reissue its guide on these schemes, with detailed advice on anyone --


for anyone interested in these kinds of schemes. You can find a


link to this on our website. Not all of these schemes are rip-offs


but we only hear about the ones that are. If you think this case


was bad, wait until you hear the one we have later on.


Still to come full on -- on the programme, sales which haven't


lived up to the height. It is a definite scam. Here in Manchester,


hundreds of people have been along to our pop art shop and there are


plenty more people waiting to tell us their stories. Let us go inside.


When Foroozan decided to invest in a timeshare property, she didn't


realise her holiday home would be so problematic.


They invited me to buy a timeshare from a company. They started to


have a timeshare as a temporary, then I had it as a prominent, now


until 2067. With high maintenance charges? Yes. I must say, yours is


not the first story I have heard. There have been some absolutely


awful examples of this selling of timeshares, thousands of people are


ruined -- it are in the position of being obliged to pay thousands of


pounds for a property which will continue until 2067. That seems


absurd. What makes it absurd is it is legal. You side something to


make it legal for them to do it. It must be you angry. We're hoping the


UK or Europe will legislate to say, people can absolve themselves of


their time share liabilities. At the moment, that hasn't come


through. I am so sorry, there's nothing in law I can see that gives


you protection at the moment. Sadly, we couldn't help Foroozan.


Let us hope by hearing her story you will not be caught out.


We have had another incredibly busy day here in Manchester. It has been


wonderful having the BBC Learning team with us, dispensing a lot of


advice to people and I got some myself.


We are asking and encouraging people to do is to maximise your


maths, then you will not be ripped off. It doesn't matter if you get


it wrong, just try. I feel I am setting myself up for


failure but I am prepared to give myself a go.


What have we got here? I am going to views these two ropes. Try to


release yourself without taking the rope off. Can we go around the


corner? That is a cheeky. The idea it is to use maps to work out the


number of moves to get yourself free.


We are getting along like a house on fire. Proving to be rubbish at


this task. Give us a week or two! The way things are going, even a


week might be optimistic. Thankfully, we have an expert on


hand to help us escape. Underneath... Through here. There


you go. Maths is fun, something we can all


do. Even if we are not very good, have a go. There are lots more


games online, lots to practise. In the real world, you are armed with


good maths skills so you won't be ripped off.


With pension payout rates crashing and the cost of living soaring, it


is no surprise that official figures show a rise in the number


of newly retired pensioners going back to work. It seems instead of


enjoying the so-called golden years, an increasing number of over 65


feel forced to return to work. Some you have tried to plan ahead by


investing your money to top up your pension. When Ian Langley did that,


his investments didn't go at all to plan.


Ian Langley is a company director. In his spare time, his collection


of vintage fire engines provides a much needed to escape from his


working life. When he is not tinkering with his engines, he


prides himself on preparing for his teacher. In 2009, the funds in his


private pension scheme were cut to half and he looked at other ways to


bolster his finances. The one thing I was aware of was property


maintained or increased its value over the years which is why I was


looking for an alternative form of investment which wasn't too risky


but which would produce a better yield than my pension funding


arrangements. After signing up to way trade newsletter, he was e-


mailed by a company called Property Mentor. They offered prospective


investors the chance to climb the property ladder and managed a


rental portfolio through a series of courses and tuition. I could


invest in property, it would produce meat a net cashflow each


month which I could use to top up my pension. From what he read,


Property Mentor or were offering the chance to make money by


investing in property. Most temptingly, the company seemed to


be saying he could do this without using any of his own money for a


deposit. I went to a taster session and it sounded plausible. The


workshop was run by the guy who roams the company. In the lead by


signing up he would be offered a profit-making investment property


within 12 months. He liked what he heard and so he paid �997 and


signed a credit agreement for �7,200 to pay for the cost of the


seminar, and the information he thought he would be getting from


them. As I drove away from the course on that Sunday, I felt I had


now done what was necessary to secure financial security for by


family. In order to secure that future, he agreed to pay the fees


in monthly instalments for six years, as well as an additional


�1,420 for demand reports giving details of properties. I was by


then convinced the system made sense. Other people had stood up


and showed all of us on the course how it worked for them. That's why


I was prepared to pay extra. With all payments in place, Ian waited


for Property Mentor to supply him with details of properties in his


chosen area. Ian didn't have long to wait. But, what he received fell


way short of his expectations. properties they were sending me


were several hundred miles away from where I live or work,


difficult to manage those properties. They all require a


deposit. The cheapest was a �16,000. Typically there were �40,000


touching macro they were �40,000. Ian was beginning to get married


and he was on the anyone. -- get worried and he wasn't the only one.


Other people on the course were getting despondent. Vienna was


convinced for if you �1,000 initial outlay, he would get a profit-


making property. Instead he has I have spent a lot of money, and I


have ended up with nothing apart from more expense. I am left


thinking I have wasted something like 18 months, and I have not yet


achieved my ambitions for financial security. To date, Ian has paid


property meant for more than �4,000 and is continuing to pay the


monthly fee he signed up to because he did not want to damage his


credit rating. Because I am involved in financial services, I


cannot do this. We contacted the company and asked them to comment


on the case. They were so convinced that the money Ian has spent with


them has been money well spent that they agreed to give us an interview.


We ask them to explain services that they provide. We teach our


delegate seven financial tools. Any one of those financial tools enable


you to buy property without spending your own money. So in a


sense you're spending money -- you are spending what we call other


people's money on property, a bank's money, alone, that type of


thing. So if he had put our techniques to the properties, he


would have been able to buy them without tying up his own personal


capital. But Ian is not convinced and he wants his money back. We'd


be company be able to give him a refund? We have given him a


guarantee which we will stand by. Any business, any product out there,


if it is delivered, even with a guarantee, why would a customer be


able to get their money back? We have delivered everything in our


contract with Mr Langley. I think we have gone way beyond it to try


and help and assist him. If our delegates put the effort into the


system, it works. If they put the effort into asking for their money


back, I would question of where their effort is being paid. There


is no suggestion that Property Mentor have broken any laws in


their dealings with the in. Ian admits he was seduced by the sales


patter and did not fully questioned the scheme before signing up. For


him, the whole experience has been an expensive washout which she


hopes others will learn from. feel like I have been suckered and


that hurts. Earlier we heard about Adrian Jones from Wigan a los


�35,000 to unscrupulous land developers. It is a staggering


amount of money to lose, but unfortunately not the highest


amount that we have heard about in this situation. Sports-mad Eric


Wright has worked since he was 14 years old. When he retired he


wanted to invest some of the money he had turned to make sure his


future was financially secure. was having a good back-up as I got


older, and not knowing naturally how your health is going to be. I


live on my own since my wife passed away so protecting my future was


important. In January 2010, Eric received a cold call from a company


called Property Partnership, based in Bishopsgate in London and not to


be confused with other companies with similar names. They were


offering him an opportunity to buy plots of land which apparently had


massive investment potential. They seemed to be kosher Randy promises


were reassuring. They made it sound so good that I could not refuse.


Eric bought a plot in Peckham for �5,000. He then paid another 25,000


for one in King's Lynn, which she was promised would be sold to


housing developer by Christmas making him a large hassle-free


profit. They said Des was going to be a good return, one of the best


sites they had ever had. -- are they said this was going to be. I


wanted to increase the money that I had and I thought this would be


ideal. Once he had laid out the initial �30,000, the company kept


asking for more and more money. Faced with persuasive sales people


and what seemed like legitimate business, Eric felt he had no


choice but to pay, and soon found he had forked out an initial -- an


extra �42,000 on top of his initial investment. They have a way of more


less pressurising you and making you see their way. They say that if


you do not act urgently you could lose all the previous money you


have invested. They say it is nearly at an end, the sale will be


going ahead shortly. By the time he handed over another �6,000, Eric


was getting suspicious. The paper work he was being sent did not


stack up and all his queries seem to be answered with more demands


for money. The final straw came when they said that in order to get


the payout that seat -- that they insisted was still coming, he would


have to shell out more cash. thought this was definitely a scam.


I said no, I will not send any more money, there is something wrong.


�78,000 down, Eric discovered that despite what he had been told, the


land he had purchased had no planning permission. As Larry


Russen, a local chartered surveyor in King's Lynn explains, this makes


the land virtually worthless. lander derricks owns is probably


worth only around �500 because it does not have planning permission.


-- At the land that any cones. The council is considering whether the


area should be given residential planning permission, but that is


not guaranteed. When he realised this, and it asked the Property


Partnership for his money back. said he was not happy and he wanted


his money returned. I have not had any reply for them -- from them.


This gets worse. Rip Off Britain did some investigating and


discovered that ownership of the property in King's Lane was never


even transferred to Eric. It seems that he has been sold other pieces


of land around the country. He cannot complain to Property


Partnership because they have gone into liquidation. In the meantime,


78-year-old Eric has lost his life savings. It is all right looking


back on these things, saying, I would never do that again, and I


would never do it now, but I was gullible to taking everything they


told me. We did try to cop it -- we did try to contact the Property


Partnership, the company that took such massive sums of money from


Eric Wright. We sent them a letter, but it came back marked, Return to


sender. We have tried other avenues to get in touch with them, but to


all intents and purposes, it seems that they, like the money, have


simply disappeared. But we will keep trying.


According to the FSA, landbank schemes are �200 million a year


headache for them. According to them the perpetrators are using


ever more aggressive than criminal methods so no wonder, as we have


seen today, that so many of our viewers have been conned by these


schemes. But what is the FSA being to combat this? I have come to


their headquarters in Kenilworth to find out.


Our postbag is full of letters from people have been taken in by the


so-called land bank schemes. How seriously do you rate the problems


here at the FSA? This is one of our top priority problems. Land Banking


is in one of our top three problems. We are dedicating a lot of


resources to this. Are there any land bank schemes that people


should even consider? Have I seen a Land Banking scheme that has made


money foreign investor? No, I have not. Is it always Ali -- an illegal


activity to sell land that one day might get planning permission? No.


But we need to think whether this is a realistic prospect. Is it


likely that a large house builder will buy land from you and 99 other


people who are all owned land and plots in a field or are they more


likely to deal with one person, farmer or landowner? These


companies are feeding off stories in the media about to show a --


about a shortage of housing in the UK. They make themselves sound like


the real deal, like proper investment advisers. They do not


come across as conmen. What chances there of people who have been


fleeced getting their money back? It is very unlikely, I am afraid.


People lose shocking amounts of People lose shocking amounts of


money to this and other types of scams that we deal with. Why are


you not shutting them all down, you not shutting them all down,


where are the teeth of the FSA in tackling this problem? The FSA does


not allow it asked to close schemes down. If we can prove that this is


a collective investment scheme, we can go to court and we have done


several times and closed down �50 million worth of Land Banking


schemes. Where we cannot prove it is a collective investment scheme,


we have not got the powers to do that. In that case, we speak to the


police and the Insolvency Service because they have been good at


closing down 70 of these schemes. Thank you very much.


He that Rip Off Britain we have always ready to investigate more if


your stories. Confused over their bills, trying to wade through


never-ending small print at least you totally confused? I might have


been stupid for not reading it. could kick myself, I really could.


You may have a cautionary tale of your own and would be happy to


share the mistakes you have made with fast so that others do not do


the same. No one knows about this, so I would like to get this out.


You can write to us at the address The Rip Off Britain team is ready


and waiting to investigate your stories. There is so much


uncertainty over pensions that planning for your future has become


more important than ever, but it does not come without its risks.


Choosing where to invest safely can be a complicated business always


seek independent advice before you hand over any money. As we always


says he run the programme, if it sounds too good to be true, that is


probably because it is. That is all for today, we hope you will join us


Angela Rippon, Gloria Hunniford and Julia Somerville investigate why viewers have been left out of pocket. Whether it is rocketing energy prices, unexpected bank charges, or a catch in the small print that has had devastating consequences, they will get answers from the companies responsible. Plus, the team have been on the road, tackling consumer complaints face to face at the Rip Off Britain pop-up shop.