Episode 20 Rip Off Britain

We asked you to tell us who has left you feeling ripped off? You

contacted us in your thousands, by post, e-mail, even stopping us on

the street. The message could not be clearer. They are in it for what

they can get, not to provide a service. If it upset me so much I

didn't sleep. You told us, with money tighter than ever, you need

to be sure every pound you spend is worth it. How do I get my money

back, I am entitled to it. Whether it is a simple mistake or a catch

in the small print, we will find out why you are out of pocket and

what you can do. He keeps asking the questions.

do get results, that is the interesting thing. Your stories, if

your money, this is Rip Off Britain. The Hello, a huge welcome. This

series is definitely on your side, if you don't get what you are paid

for. The people we have met have all

made plans for the future and made sure they made the right decisions

for themselves and their cash, but their investments have gone badly

wrong. That has not been easy to sort out.

As a result, some have ended up in dire straits what others after

forking out thousands, have been left feeling fobbed off. But, we

have some advice to stop the same thing happening to you.

Coming up, the former nurse who thought she had taken out a �17,000

mortgage. How come her bank now says she owes them �100,000.

A I was shattered, I couldn't believe it was happening to me.

After investing all their retirement money, this couple has

been left reliant on their son to pay their bills.

It left us in a position of having virtually nothing left in the bank

and relying on others to live. Next, an investment that seemed to

be a perfect opportunity. It certainly did turn out to be life-

changing, but not at all in a way that was expected.

At 84, Margaret should be enjoying her retirement in peace. Over the

last five years, her quiet life has been disrupted by the effects of an

investment her back recommended she take out.

I am not money minded, I have no financial interest really, but when

Barclays Bank said I should do something with his money, I thought

it was a good idea. So I was happy to invest in this fund they

recommended. It never occurred to me not to trust them. Her financial

situation changed in 2007. Recently widowed in Spain, she made the

decision to move back to a retirement village in the UK.

I came here because I had come back from Spain, and by a son lives

half-an-hour away. I thought this would be quite nice to be near him.

If you live on your own, you are very isolated sometimes. I thought

this was the best of both worlds. You have security, privacy, and to

be with other people if you want. Which is good. Margarets new

retirement plan would be funded from her life savings and the sale

of her Spanish property. She invested �247,000 which she put

into her account with Barclays Bank. I had the money transferred to my

savings account in this country. When the banks thought I had that

much, they said I should be doing something different with it, put in

it somewhere else. It sent a financial adviser who recommended

she invest in a scheme, and income fund. He told me it would bring in

�5,000 a quarter. With my pension, that would be about enough to pay

the rent. I told the adviser I didn't want a higher risk but

moderate risk, in order to get a good return. But I don't know much

about these things. On the advice of the man from Barclays Bank, she

placed her entire life savings into their recommended fund. She did it

because the bike had themselves classed the fund as unadventurous.

On that advice, it seemed the sort of investment she needed, unlikely

to throw up nasty surprises, or so she thought. Right from the start,

the fund did not perform in the way she expected. I took this

Investment out, it started to fall. Each month, it had fallen by

�10,000, �20,000. December, it had fallen so much, it was only worth

half what I had invested in. Half the money I had put in. I could see

it I wasn't going to be able to stay here. I wouldn't have enough

for the rent. I was worried about Margaret was far from being the

only Barclays Bank customer in this predicament. The bank had this

classified the risk on this fund and on another. In total, 12,000

customers, most of them retired or approaching retirement, were

finding their investments was a lot riskier than they had been led to

believe. They had invested a total of �692 million, much of which,

with the funds underperforming, now appeared to be lost. Barclays Bank

faces the biggest fine levied on a bank for its dealing with high

street customers. In 2011, but his back was fined by the FSA for miss

selling funds. It said they should always have been described as high

risk and should not have been sold to older customers who could ill

afford the heavy losses. For Margaret, this seemed good news,

she hoped to reclaim some of the money she had lost. When I realised

how much I had lost, I contacted Barclays Bank. I asked if there

could be compensation because I didn't have enough. I received a

letter from them, saying they admitted they had wrongly advised

me, but I wasn't entitled to any compensation. I don't get angry

about these things, but I was very upset because I wouldn't be able to

stay here. I was worried about the money situation. The then, Margaret

heard of someone who could help. daughter then told me she had heard

of a firm. This company had already advised others stuck in the same

situation, and when they contacted the bank about Margaret, the bank

changed its tune. They offered �44,000. I was very surprised

because they had said nothing was due to me. It did not cover the

amount I had lost. It would have put me up on an even keel. Claims

did not think but his dad was offering enough and an adjudicator

at the ombudsman agreed. The bike was told that in generate this year

but it disputed the decision. So Margaret will have to wait for the

ombudsman to make a final ruling, meaning further months of

uncertainty. I had always been with Barclays Bank, 60 years at least, I

trusted them. We contacted Barclays Bank about

Margaret. They say they are sympathetic to her situation, and

after a recent review, agreed the funds she was sold was not suitable

for her needs. They are sorry this is causing Margaret ongoing

distress, and say they will continue to treat her case as a

priority, to ensure they put things right for their customer.

For Margaret and thousands of other pensioners affected in the same way,

this continues to cause unwelcome stress because, until it is

resolved, she is worried she cannot afford to stay in her home. All I

am concerned about is having enough money to stay here. I wouldn't

trust them again. Now, someone who has lost their

money, he doesn't want the same thing to happen to anyone else.

I thought I was leaving a really good nest egg. They are burdened

with �100,000 to pay back to the Bank of Scotland when I die.

situation Penny Cooper has found herself in is the opposite of

everything she had planned. Last year, she retired from her job as a

nurse at the Royal Berkshire Hospital. She goes back to

volunteer. Through her 30 years of service she was careful with her

money, hoping the value of her home would safeguard the family's future.

Throughout my life, never had a lot of money, I spent what I could

afford. They really did plan for my children's future. For me to know I

could feed them half this property, they would get a nice little lump

sum, was such a wonderful feeling for me. It made me feel very

content. Her problem began 15 years ago when after the sale of the

family home she wanted to buy some I knew. I bought this house in 1997,

fell in love with it, liked the area. It was just what I wanted.

Penny could have used her savings have to buy the house up right but,

wondering if it was better to keep that money back for a rainy day,

she arranged a visit with an independent financial adviser.

I saw the adviser, we decided it was easier for me to have a small

mortgage. It would give me the opportunity to have money in the

bank. Penny went ahead and bought the house. �69,000. Taking out what

she thought was a standard mortgage with the Bank of Scotland.

mortgage was sorted out for a relatively small amount of money.

Last year, after she retired, she decided the time was right to re-

evaluate her finances. She went to a new financial adviser who

delivered penny some earth- shattering news. He said, I have

some devastating news. The mortgage you had was called a shared

appreciation mortgage, it means, when you die, your children will

have to pay back to the Bank of Scotland �100,000. I first reaction

was to vomit. I rushed off to the loo. I was shattered, they couldn't

believe this was happening to me. My thought was, how can �17,000

suddenly changed to �100,000 that I owed them. Effectively that is an

increase of nearly 500%. Penny couldn't understand how her loan

suddenly got much bigger. It is the worst thing ever. I didn't know

what to do. Unfortunately for penny and the thousands of others who

took out a shared depreciations mortgage, it is not a typical

mortgage at all. Sold between 1996 and 1998 by tool banks, it was a

unique financial product. The bank offered a loan which was interest

free, in return for a percentage of any increase in the property value.

As this solicitor explains. This kind of mortgage is an arrangement

where a home owner can borrow up to 25% of the value of their home.

When they come to repay that borrowing, they also have to pay up

to 75% of the increase in value of their home as well as the original

loan. The loan itself is on a 0% fixed interest rate. What no one

had predicted was the property boom at the turn of the century. House

values have shot up and the amount of money anyone with this product

would find themselves owing the bank.

The problems associated with a product come as a result of the

exponential rise in property prices. When people come to repay their

loan, paying back a share of the appreciation, the end up with less

than half the value of their home. Which is exactly what has happened

to penny. It means when I die, or I need money, if I have to sell this

property, I have to pay back �100,000 before I get any return.

The financial adviser and gave me advice, I took her advice, I was

happy with that advice, I trusted her. What has happened now? It was

the wrong advice. I feel badly about that. If the property market

had gone down, penny would have paid no more than the value of her

initial loan. So she isn't the victim of bad advice, simply bad

timing. Especially as, if she had bought her house a few months later,

those mortgages were no longer being sold. The banks that did sell

them at set for many people it resulted in considerable hardship,

but they are satisfied the terms and conditions as were made very

a very sympathetic approach to anyone in difficulty because of

their shared appreciation mortgage, but stresses that customers were

strongly recommended to take financial and legal advice to

explain how the product worked. If Penny feels that it was mis-sold or

that she was given unsuitable advice, they suggest she takes that

up with the financial adviser who sold it to her. They are saying she

is suffering with financial hardship she should contact them

hardship she should contact them directly to see if they can assist

in any other way. What she is going through is a harsh reminder that

even when you do the right thing and take expert advice, you still

need to understand exactly what you're getting yourself into. And

the risks. I thought I had done everything right. I had gone to a

proper person that would sort out mortgages that I did not understand.

I feel very much that I have let my kids down. By and still very

emotional about it and very upset that this situation has come to

pass. I would take that to happen to anyone else. You are my best boy.

-- I would hate that. A rip-off Britain has opened up a pot up shop.

It is our opportunity to meet many of you face-to-face and hear all

about your consumer gripes and problems. Inside, our team of

experts is ready and waiting to help people with their complaints.

Almost certainly, your case will be upheld. What the first to see

Sylvia was Aisha, who needs steering in the right direction

after being ripped off by her driving school. I paid for 10

lessons and I only got seven of those and then the driving school

closed down. I did not get my money back. How much did you pay? �180.

What is the situation? Unfortunately, the company has been

bought out by a different company and as soon as a company takes over

another one, the liabilities of the previous company go. Unfortunately,

although the previous company said they would give you a refund and

did not, the existing company are under no obligation to give you a

refund. And he did not pay on credit cards? If you paid by credit

card, there would be some way of getting your money back. You pay by

cash? I have got no receipts or anything. She has to write that off

to experience? I am afraid that is the only thing I can say. Not the

answer she was so before but the good news is that she has now

passed her test. So many of you have written to us with your

complaints about consumer affairs that we thought the best thing was

to construct this old thing, aptly called a gripe box. You can go in

there and get things off your chest. The supermarkets seem to be taking

over and they pretend that they are cheap but they are not. I would

like to complain about student bus fares. I would like to complain

about PPI. We are told paying bills by direct debit says its money but

Sarah Pennells' next case is being penalised for being unable to do so.

All of the companies that I have my bills with, one in particular

charges me �5 every month if I do not pay by direct debit. Is there

any particular reason why you do not want to? I get paid every 28

days and a direct debit being on a set day does not fall within a

suitable site will. Companies love direct debits because they are much

cheaper to process, but the real reason they like them is that once

you pay by direct debit, you are less likely to check the belt and

switch away. It is an anchor for you to stay with that company. Have

you had any luck trying to get the direct debit date changed? I have

not. You have a couple of choices. You could try to escalated, to say,

is the way I could pay regularly without getting penalised? Secondly,

vote with your feet and switch to another company that will not

penalise you. I think you make a valid point which is that if you

are prepared to pay, why she should be penalised?

Still to come: How this man's dream of city-centre living went

disastrously wrong until we started looking into what had happened to

his money. That �10,000, if I cannot get it back I have lost it

and I cannot buy a flat. It is always a big decision but choosing

bricks-and-mortar over a pension when it comes to planning for

retirement can be a popular choice. Although the profit from property

has levelled out -- has levelled out, the prospect of something

tangible to pass on to your children means that investing in

houses is still very appealing, exactly the reason our next viewers

chose to put their life savings into an of plan development in the

Caribbean. Five years on, far from making any money, their investment

has cost them dearly while the company that sold it to them seems

to be doing very nicely. When landscape gardener James

McBride started planning his guitar meant, he and his wife were keen to

make sure they would be financially secure. -- planning his retirement.

I had a car accident which injured my neck and I decided that I would

not be able to work for much longer. The idea was to look towards my

retirement because it was not far away. My son and I got together and

decided to buy a little property somewhere. Offaly a short-term

investment for me and a long-term investment for him. -- hopefully.

James, his wife and son signed up to a number of newsletters to find

a company. We looked through papers, magazines and things that would be

sent through the post. We came across Harlequin. Harlequin's

luxury resorts in spectacular locations look like the perfect

place for the family to invest. brochures we were looking at, if

they were to become real, were good. We thought it was a good

opportunity. And you can see why they were tempted to invest with

these kind of promises. Properties are sold off-plan at up to 50%

below market value and have excellent potential for high

capital appreciation. It all seemed to be the perfect solution, a brand

new home in the Caribbean, off-plan at a reduced rate, with the

potential to sell it on for a tidy profit. Convinced this was a good

investment, the family pooled their hard-earned savings. I put �10,000

in and my son would then raise the �65,000 mortgage on his property.

And they would put the deposit down on the island of St Vincent in the

Caribbean. The deal was that Greg Wood put down the majority of the

deposit but once the building was built, they would get the deposit

back so at the very least, �75,000 and perhaps even more if by then

the building had increased by in -- the building had increased in value.

Greg Wood then owned the building, rented out and sell it off at a

later date. After all, the company was buying a 50% below market a

year in an area very much in demand. I was excited. It looked good, it

was a place we had never been to before or so it gives us the

opportunity to visit, it was ours, and yes, I was really excited that

we don't something so nice. Greggs signed up in February 2007 and was

told he would only have to wait until December the next year to get

the keys, but when he read in the magazine that completion on the

resort had been delayed, Greg decided to find out what was going

on for a start by contacted Harlequin and ask them what the

situation was. I had heard from a third party that the resort had not

been completed and they had not informed us. He said that yes,

actually it was going to be delayed by two years. The family was told

that the company had struggled to finance investment during the

recession, causing building delays and a frustrating hold up on any

return for investors. Not having an income from its, and the worry

about where it had gone, it all started to kick in. I was

frightened that we had invested in something that was going to go down

the drain. From that moment on, things have all got worse.

extra years added meant that I was continually spending money for

which we had saved. It left us in the position of having virtually

nothing left in the bank. And we had to rely on others to continue

to live. Not a good position to be in. By the time the two years to

come and gone, the property seem no closer to completion and with the

return coming to nothing, James was getting into debt. He had to ask

his son to help him out financially. From my perspective, I could not

stand by idly and watch their situation spiral. For the last two

years, I have been helping pay for some of the larger bills on an

ongoing basis, to help them out. Frustrated by lack of information

from a Harlequin, Greg at his partner decided to fly out to get

answers. When we got there, we had a tour of the site, and the site

manager showed us what was being built. He convinced us that

actually, the location was very close to completion. When I

returned I sat down with my parents and convince them that the site did

exist and it was real and that it was very, very close to completion.

So we breathe a collective sigh of release -- sigh of relief,

confident that we would see a return on our investment. If only

that were true. Despite the promises, the family are still

waiting for the four property to be completed. We have spoken to other

customers still waiting for their keys as well. For the company

itself, things seem to be going well. According to their accounts,

Harlequin properties' business turnover grew by 18% last year and

the reported profits of well over �1 million. The family is

devastated that what should be a great Investment has left their son

making huge sacrifices to bail them out. Supporting appearance has cost

me �41,000 which, as you can appreciate, has left me in a

difficult situation, such that I have had to put my own house on the

market to clear my mortgage and my borrowings and concentrate on

supporting them. It has caused a great deal of concern and anguish.

My son is suffering even more or, if you like, financially, and I am.

The guilt that we have roped him into something like this, and then

we had to rope and then to help us survive because we had no money

coming in, it has put the family under strain. We contacted the

under strain. We contacted the company to find out what was going

on. They say that delays in completing the property, while

obviously regrettable, are down to circumstances beyond their control

and largely caused by a contractor or misappropriating funds from the

resort. This is situation has been addressed and the resort is now

open with all but a few of the properties sold and the rest of the

development underway. They insist they have kept investors informed

at every stage and double their willing to return deposits if

investors no longer wish to proceed, or only a tiny minority are taking

that option. They have assured us that this facility is built and

ready to be fitted out but if the family want to get their deposit

back, they would be happy to arrange it. Alternatively, the

company are confident that they can resell it and provide a substantial

return. Greg has given us some good news. He said that he has now

reached an agreement with the company and has received a refund

for his deposit from them. He says any confusion between them has now

been addressed and that the company is acting quickly to put things

right. Let us hope that means that the family's finances and James

retirement can now get back on Manchester City centre, a hotbed of

flats and apartments, ideal for anyone wanting to live and work in

the heart of town. Moving closer to the action was what Paul wanted

when he decided to look around for a new pad in Manchester five years

ago. I wanted to move to the city centre, thought about flax. Loads

of developments. A after searching, Paul found the sort of place he

wanted. I found an off Plan Investment, in Piccadilly,

advertising a 30 storey building, glass, a beautiful building.

property was being developed. would be moving in rather than

renting it. I put down a deposit. I knew it wouldn't be built for a

while. In 2000 m seven, Paul put down in non-refundable deposit of

�10,847, and looked forward to his new life in the city centre. 18

months later, along with the rest of the economy, the property market

took a dramatic turn for the worse, and Paul began to worry about the

lack of progress on the properties. I arrange a meeting with an

executive who said they still owned the land, it was theirs. They would

eventually build on it. It could be five years down the line before

actual construction took place. top of the delay, Paul says he was

told the apartment he signed up to wouldn't necessarily be the one he

would get. They were looking at baby-changing the function of the

flats, to a pub and hotel. That isn't what I wanted. With the

company saying his deposit was non- refundable, Paul had to wait. The

suggestions the company came up were not what he wanted. I could

have put my money in property in Liverpool. I work in Manchester.

The other option was a land deal. They sold it to meet on the fact

once planning permission was obtained I could double my money.

The as it sounded plausible, Paul agreed to switch his money to land

deal. That meant his investment was transferred to a different company

within the group. In one sense, that was no bad thing as at this

time, the original company went into liquidation. From June to 1010,

Paul dealt with a second company who, a few months Messer, centre

more bad news. -- a few months later. In October 2010, a letter

said there was a problem with the land scheme. Paul looked more

closely at what he had signed up to, and contacted the company to make

clear his concerns. They sent me information with regards to

different options, office spaces, flats in the rubble. Orate credit

note, saying they recognised they didn't have enough money. It was an

acceptance they had my money. Indeed, that is all it was, he is

�10,000 seems to have become simply figures on a piece of paper. The

only way for him to cash in on his credit note was to bite into

another investment. There was a time limit, his credit note came

with a catch, and expiry date of January 2013, something Paul was

furious about. Looking at the details on a credit note, it says

it is non-refundable. In 2013, this money will disappear. How can that

happen? Is It Legal? With the expiry date drawing closer, Paul

feared he would never see his money again. That �10,000, if I can't get

it back, I have lost it. That means I can't buy a flat, I have no

deposit. I should be living there. The best flat in Manchester. It was

at that point, Paul came to us. When we got in touch with the

company, the story took an unusual twist. The company came back to was

disputing much of what Paul had said, saying he must be confused

about the details. They believe they have acted very fair lick and

honourably, saying the contract was with a subsidiary company, and his

deposit was clearly stated to be non-returnable. When that company

was driven out of business as a result of the financial crisis, the

company say they had no legal obligation to help him recover his

money. As for the expiring credit note, they say they would have been

happy to extend it if asked. Even so, our intervention has prompted a

positive result for Paul. The company told us they have resolved

their differences with him and he has his money back. The company

sent us a piece of paper signed by Paul say he doesn't consider there

to have been any wrong doing, simply a misunderstanding. Claims

he would be pleased to consider investing with them again. We

thought the story from Paul was still worth telling. We remember

how angry Paul had been when he first contacted us. I gave them

�10,000 for a flat, which they have not built. All I want is my

original money back. We are delighted to have helped make that

When you feel if you have had a raw deal, it is hard to know what to do.

To help you, we have put together a new booklet with practical tips.

You can download a free guide from our website. Or receive a copy in

the post. We will give you the address at the end of the programme.

We all want to make the most of our money. If we invest it, we probably

hope we can watch it grow. If an investment goes wrong, but only may

not get a return you expected, you could end up losing the lot.

People really want to make their money work for them and are finding

if it is in the back, it may only be earning half a % interest, less,

sometimes. Naturally, they think it isn't worth having. They are

looking for a way to make their money work harder. They can be

tempted easily into investing in to land, gold, shares. These things

are highly speculative, but they are sold by Snoop sales people who

earn a great deal of money by persuading people to invest.

you're thinking of investing your money, there are several key things

to consider. Check with the FSA if the company you are talking to his

authorised, or if it is on their list of unauthorised companies. He

even mind if you don't deal with an authorised firm or investing abroad,

you will not be covered by the ombudsman or compensation scheme.

Remember, if you have already been scanned by fraudsters, they are

likely to target you again. Make sure you have reported any problems

to the FSA. In vestment is always a risk. People should understand that.

You are told you need to take a risk to get bored. But you have to

realise if you invest rather than say, your money could go down in

value. In rare cases, it could disappear. As soon as anyone tries

to sell you an investment, you should say, what is the downside?

The worst that could happen. If they are not honest about that,

walk away. I am joined now by mark, the chief

executive of the compensation scheme. It is a mouthful, what is

this compensation scheme and why was it set up? It has a simple

purpose, we are the people who will protect your money if a financial

services firm goes bust and takes your money with it. It makes it

seem as if it means, everyone's money is protected, regardless of

the company? Not quite, we protect all financial services firms

regulated by the FISA, it covers deposits at a bank or building

society, your insurance policies. It covers your investments, it

covers mortgages and pensions. Importantly, it also covers bad

advice that you may get from a regulated independent financial

adviser. If you get bad advice on your investments and have a claim

against that financial adviser, who cannot meet your claim, we will

step in and protect you. In what circumstances would your

organisation step in and pay compensation? We will step in where

a financial services business has gone bust. If you have a complaint

about a solvent financial services business still trading, you should

go to the ombudsman. But we step in when his business has gone bust and

has either taken your money with it, or cannot meet claims you may have

against it because you received bad advice. A do people get all the

money they invested? There are limits on compensation we can pay.

For example, if a bank or building society or credit union fails, our

limit on compensating savers is �85,000. For investments, the limit

is �50,000. For most insurance policies, we will cover 90% of what

you were entitled to. One exception, compulsory insurance policies like

car insurance where we will cover 100%. A what would be your final

line of advice to people before they undertake any kind of

financial transaction? My advice would always be, always, always

check whether the firm you are buying a financial product form --

from, is authorised, or whether the adviser is authorised by the FSA.

If they are up and something goes wrong, we will be there to protect

you. Confused over your bills? Trying to

wade through a never ending small print? You can write to us at this

You can also send us an e-mail. Do not forget, our team is ready

and waiting to investigate your stories.

As you can see, it is all too clear from our stories today, trying to

find a safe place to invest in always easy. Any investment

involves risk, so you need to take care on what those risks are from

the beginning. It may take work but it is worth it

in the end. However convincing the sales pitch may sound, nothing is

ever guaranteed. The more so what makes you think an investment is a

sure thing, the more important it is you get some sort of independent

advice before you sign up. That way, you can minimise any