Home Study Scam You've Been Scammed


Matt Allwright uncovers the secrets of sophisticated scams. Matt meets Caroline, who spent 15 years studying and then faced the news that her course had been a con.


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Every year con men and scam artists net an estimated �3.5 billion from

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you and I, the British public. They don't care how they do it and or

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how much damage they cause. They only really care about one thing -

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Coming up, a further education college whose bogus qualifications

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can teach you a very harsh lesson. I have got a piece of paper

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upstairs, certificates that mean nothing. Would you pay �1,000 for

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certificate that is mean nothing? The property investment that left

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innocent people high and dry. It makes me really angry that these

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people are so arrogant. They feel that they can get away with this.

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If they can spend people's money who have been saving all their

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lives. I'm here to tell you what the con

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men doesn't want you to know and how to stay ahead of the game and

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The cost of a full-time university education can be crippling and if

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you add to that, the time you will need for lectures and seminars, for

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those of us with jobs and children, it can be a no, no. That's why home

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study makes such sense. Learning from home is big business

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and thanks to the internet you can now do anything from a diploma to a

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degree without leaving your front room. Sadly the con men have been

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doing their homework too and they have worked out how to scam people

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out of cash that they thought was buying them knowledge.

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There is a number of fraudulent operations that we've come across.

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One in particular was an overseas university which was offering bogus

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qualifications in effect. Scammers will either make up

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official sounding courses to fool people or offer rock niced

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qualifications that -- recognised qualifications that count for

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nothing. It can be a minefield, but one some of us have to enter as

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home study is offered to help those who can't afford the time or the

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money for a more traditional course. Caroline is trying to move on with

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her life after studying for over 15 years for what she believed to be a

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set of diplomas that would change her future..

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. What I was looking for was a way that I could study whilst being a

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full-time mum and whilst working full-time that I could get the

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qualifications that I wanted to basically build my self-confidence.

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Caroline had been having a tough time and was a working single

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mother taking temporary secretarial jobs to make ends meet. She was the

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type of person that the home study scammers hoped to lure in.

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There are a number of reasons why scammers can exploit our industry.

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There are vulnerable people within that. Those people that are looking

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to change jobs or are in a job that they are not enjoying. It is easy

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for that person to fall foul of the scammer.

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Caroline wanted to study psychology and she found a company that seemed

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to fit the bill. I decided I would give them a call

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to find more about it. I spoke to a very nice young lady who told me

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what to expect and I thought, "This sounds great." Just because you

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have had phone contact with one or many people at one of these

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fraudulent operations, it is really important not to let your guard

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down. These fraudulent people would have many people answering the

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phone when you call to make themselves look as genuine as

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possible. Once on the phone, the scammers

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have you where they want you. They will tell you what you want to hear

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as they attempt to hook you on to one of their courses.

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Some companies will make up qualifications which sound

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important by giving you letters that you can put after your name. A

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check with that industry, you will find those letters don't exist.

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What about the kind of qualifications that they were

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offering? Did they say what it was that you would be walking away at

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the end of it? I was looking at doing a diploma and psychology and

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psychotherapy and they told me it would be equivalent to a diploma.

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It wasn't affiliated to? No. They did mention at the time ibg an Open

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University if you did a diploma through them, it would be the same

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qualification as that and they were recognised by companies.

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Ah, equivalent to. Surely one of the scammers favourite phrases, but

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Caroline was persuaded. Handing over �200 she started working hard

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on what she thought was a genuine diploma.

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The study programmes look legitimate, but they have taken the

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course information from somewhere else because they are not

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registered with a professional body, these courses are worthless.

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Caroline, how did it work in practise? You get a series of photo

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copied pages put together in a binder. Each section, they ask you

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a question or you get a series of questions which you have to answer

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based on what you've you've read. I was looking to get highest mark

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possible. Another sign of the scam course is

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high grades. Happy pupils ask pure questions.

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I always got an A. It is not like you can converse with other

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students or speak to anybody else to find out how they are dsmght you

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are on -- doing. You are on your own.

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Caroline had been given the name of her tutor, but when she did need to

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ask him something, he seemed hard to get hold of.

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A few times, you know, when I asked to speak to my tutor, they were

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either not available or I would get told they would send me an e-mail

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later. Almost as if he had to read up on

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something. On several occasions I would get e-

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mails back, but they didn't quite answer the question that I was

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asking so whether they didn't understand what I was saying, I

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don't know. Caroline finished her so-called

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diploma course, passing with flying colours. Receiving a shiny

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certificate in the post, she happily went on with life with a

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great sense of achievement after her success, but scammers are never

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one to let profitable targets vanish.

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There is an encouragement particularly with the fraudulent

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companies to get to you do more and more courses. To keep you hooked in

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their organisation. To get more and more money out of you.

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Time passed, but the con men e- mailed Caroline again. As she

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hadn't rumbled their scam first time around, they decided to come

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back for more. They were operating under a different name, but the

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tutor was the same and Caroline was interested in what they had to

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offer. Did they say that it might lead to

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professional status of any sort? Yes, they did.

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So they gave you assurances that you would be walking out with

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something that would be professionally valid and would

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allow to you practise what you wanted to do? Yes.

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Sucked in by the sales pitch, Caroline, at a cost of a further

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�800, signed up for four more courses in psychology.

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She knew these could take a long time to complete, but hoped at the

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end of it all, she she would be qualified enough to have a job in

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the subject. I I have had this feeling that's

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the job I should be in because I had the interest.

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How would you use it? Setting up my own business and helping other

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people that have problems. Are you a motivated person? Yes.

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When you set your mind to something, generally you get it done.

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Car Caroline was patient and didn't want a radical career change until

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her son was grown-up. She studied whenever she could grab a moment,

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progressing through the courses she believed would transform her later

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life. When was the moment when you really

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started to think, "I'm really not sure about what I have been

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spending all this time and money on." Was there one moment of

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realisation? Yes. 2009 when I started doing my last course which

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was for a marking tutor which they sent to me and asked me to do.

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There was a job offer. So you have ascended to the level

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where you can be judging other people as well? Yes.

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But the dangling carrot was about to be snatched away and Caroline

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was set to learn a very harsh lesson.

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I finished the first section. Set it back. -- sent it back. Sent the

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various e-mails because I hadn't received anything back. The next

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thing I know is I get an e-mail to say they are moving offices. The

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phone number has changed and alarm bells start to ring and then when

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after a few weeks I still hadn't got anything back and I'm sending

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snotty e-mails and saying, "Look what is going on here?" Because I

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had paid for the course in full. Then the company's website website

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shut down and a message appeared saying they had gone into

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receivership, Caroline checked other review sites and found other

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people were having the same problems.

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As soon as I read things like, "Scam. This is a joke." It started

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to sink in. What exactly, what were you working

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out at that stage? Well, it was the fact that I had spent so much time,

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money and effort trying to build a better life for myself and I just

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felt cheated. Take your time. It's fine.

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The unbearable truth was the courses that Caroline had been

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studying for since 1994 were worthless, a waste of her time and

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money. You know I paid for something that I haven't got. You

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know, I have got a piece of paper upstairs, certificates, that mean

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nothing. Would you pay for �1,000 for

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certificate that is mean nothing? I don't think anybody would.

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Sadly, many others have. Caught out by crooks selling bogus home study

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courses online. I feel that the organisations that operate these

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scams are really tainting the home learning and distance learning

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industry. It is a very good industry and people do get an awful

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lot from it, but there is a small minority which are operating in

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this scam. What's Worse four, the money you

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left or the 15 years? The 15 years. You know, I mean, my life is

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brilliant at the minute, you know and I have sorted myself out and

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I've sort of worked around t around my feelings about the whole thing

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to a certain extent and I'm determined I'm not going to let it

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ruin my life, but the 15 years that I was doing all that work, you know,

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for me to come away with nothing, you know, I don't know how anybody

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is supposed to feel about that. But it is the fact that it is 15

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years of what? You know, I couldn't even explain

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to my husband how it made me feel. And it has happened to thousands of

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other people, you know that? Yes. It is cold comfort, but I think to

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take advantage of people's desire to better themselves, you know, I

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think that's pretty despicable. Yeah.

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Caroline will never get back the years she spent studying, but she

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is still fight to go try and retrieve some of her money. The

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authorities are working hard to catch these con men and in 2004

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Caroline's tutor was prosecuted and fined under the Education Reform

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Act for awarding a fake doctor doctor ate in psychology to another

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woman. He was qualified in animal welfare,

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Egypt tolling, you name it, he is qualified in it.

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Are you saying he couldn't have had these qualifications so he had

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none? Who has? Home study provides a valuable and

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cost effective service for many. How can you spot the scam artists

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and tell apart the descent degrees from the dodgy diplomas? They are

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registered with Companies House and as a basic check. It is wise to

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check how long the company has been trading for. The longer it has been

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established, the less chance of it being a scam.

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Other thing that people can do is look online and Google and use

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search engines. There is a lot of of forums out there where people

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discuss scams. The other thing that is very important, is if they

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contact us, the British Institute for Learning and Development, we

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can see if they are registered with us and any exams they offer are

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registered with an exam board. companies that offer training

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should be registered with a professional body. If you have

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already completed a course and received a certificate, check

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whether it is official. I expect to see an examination

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board logo on there as well and I think that's the most important

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thing that people can look for and they can go and check with the exam

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board or with people like ourselves and find out if that course is a

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genuine course. The reason why I wanted to tell my

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story was basically so that other people are aware of what's going on

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and nobody else gets caught out in the same way that I did and if I

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can at least stop one person from getting caught out with this

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horrible scam then at least I feel If you have got a bit of spare

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money to invest, there are a few different options you can consider.

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You could stick it into a bank account, but you might not make

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very much. You could put it into stocks and shares, but they can go

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down as well as up. Then there is property. A tempting proposition

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especially buy-to-let. But a decade ago, in the north-east,

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one group of con men turned a buy- to-let investment scheme into one

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of the largest property scams ever seen in Britain. They were the

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subject of a mammoth investigation by the Northumbrian Police and the

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Serious Fraud Office. Targeting hundreds of of investors, the

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fraudulent company, Practical Property Portfolios Limited left

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many people's dreams and lives in ruins.

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It makes me really angry that these people are so arrogant, they feel

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they can get away with this. If they could spend people's money

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that they have been saving all their lives.

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The seeds of the scam were sown in 2000 when the UK was gripped by

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property fever. The one at that time was following

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what effectively was a global property boom. There was a lot of

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money around, banks were happy to lend. People were happy to invest

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generally in property because it was perceived as an investment that

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couldn't go wrong. If you bought a property, it it didn't matter where

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it was, it was always going to go up. The impression was if you were

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a landlord, you were going to make money.

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With prices rising across the UK, Newcastle and the north-east of

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England were emerging as the perfect place for buy-to-let

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investment. Just the potential, you could sense

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that something was happening in the area. A lot of young professionals

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coming in. A lot of new students. There was a lot of new businesses

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with fresh ideas coming to the area and a shortage of houses that were

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geared for them. One of the companies to try and

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capitalise on the north-east boom was Practical Property Portfolios

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Limited or PPP who sold buy-to-let properties for �25,000. Many of the

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properties they sold have now been renovated or demolished, but these

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houses in the same area provide an area of what PPP were offering.

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Investors were sold run-down houses and PPP promised to renovate them.

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Kay Rogers from the Serious Fraud Office saw how people were drawn in.

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For an investor, having received the entire amount of the investment

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upfront, the investor was promised the purchase of the property, the

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refurbishment of the property to a tenantable standard. That tenants

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would be found and would be managed, the rent collected, the property

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would be insured and crucially in this particular one, that void

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period insurance would be purchased. When there was no tenant occupying

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the property and paying rent that the insurance would cover the rent.

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So this one gave investors the impression that they couldn't lose.

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But you could and in the end nearly 2,000 people did as victims of such

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a cruel scam, many of them are ashamed of their involvement and

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unwilling to talk. The people PPPP succeeded in roping into their

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scheme were mainly quiet, first time investors like Nancy Lewis.

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Nancy first got in touch with PPP in 2003 and her son Ed recalls how

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excited she was by what they were offering.

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She was very fond of the north-east. She had been a student at the

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University of Durham and she had a good time up there. And soy think

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she was looking at an investment which she felt could put something

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back into an area that she was fond As PPP promised to buy houses in

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slightly run-down places and refurbish, Nancy felt not only that

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it would be a wise investment, but she would be helping with the

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regeneration of whole areas. She was of retirement age and she

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had money which she saved up over the years and she was looking to do

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something with that. I think my mother wanted to invest her money

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wisely. Obviously to build that money up to pass on to myself and

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my sisters in time. I believe she became aware of PPP

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through either a friend telling her about the investment opportunity,

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but also they had, I believe, advertised through the national

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press. She believed it was a legitimate business and she thought

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it was a really good and clever idea.

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So much so, that she handed over �50,000 to PPP so they could buy

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her two properties. And many other people ploughed in greater amounts.

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During in boom time, Practical Property Portfolios Limited were

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taking full advantage of the interest shown in the north-east by

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outside investors. 90% came from outside the area.

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have been sophisticated in the way they they seduced the investor. If

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you replied to one of their adverts in a national newspaper, you would

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be sent a glossy pro pro sure and an invitation to see the scheme

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first hand as Detective Mark Woods was to find out, it was a slick

:20:26.:20:31.

operation. You made your initial inquiry to

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PPP, you would be collected at the station or the airport by a

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salesman who would pick you up in one of the company Jaguars, you

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were taken to an area which was usually Hartlepool and you were

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three properties, all similar properties. There There would be a

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property as PP said they bought it. There was one as they bought it and

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one refurbishment and one at the end. These were the properties that

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people who invested in PPP thought they would end up.

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This is what people thought they would get once the renovations were

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completed and a tenant was in place. Rental incomes varied, but in

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effect, they were expecting to to receive somewhere in the region of

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about �100 a week. So you paid a cheap price for a

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property that would be renovated and quickly grow in value, while at

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the same time providing affordable housing for people who needed it

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and they would pay you rent. It seemed like a win, win win

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situation and PPP enticed up to 2,000 investors in total. In

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reality, all was not what it seemed. After three years the whole thing

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was about to come crashing down. The Northumbrian Police first got

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wind that something was not right when Mark received a call from a

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disgruntled investor. They were an overseas investor and

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they had relatives in the the Gateshead area. They came home and

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saw what they bought and weren't happy. Basically what they thought

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they hadn't got. They thought they bought a property that was being to

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be refurbished and tenanted, but they purchased a boarded up

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property in a down run area. Mark contacted Trading Standards

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and local housing associations to find they started receiving

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complaints from worried investors who were beginning to realise that

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their their vemplts weren't as -- investments weren't as sound as

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they believed. Nahns Nancy Lewis was among them.

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As soon as she made the investment, it was difficult to get hold of

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anyone specific. She tried to phone them and was passed from certain

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departments to other departments. When no reasonal money came in --

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rental money came and no answers from the company, she went to see

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the houses for herself and what greeted her were empty boarded up

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properties like this one in the same area.

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She was, of course, shocked at the state of them. This is money that

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had been saved up by my mother over her lifetime, taken a long time to

:23:22.:23:27.

save and then once it was gone, it was upset. When I found out it was

:23:27.:23:33.

a scam, it was very frustrating. I felt quite angry about it. I think

:23:33.:23:38.

she felt rather foolish, frustrated, upset, stressed about the whole

:23:38.:23:42.

whole situation. And outside investors who had not

:23:42.:23:45.

seen their properties were finding out what they had spent their money

:23:45.:23:51.

I contacted a guy that lived in the Bristol area. He some property in

:23:51.:23:56.

South Yorkshire which on speaking to him, he thought he had a

:23:56.:24:01.

terraced property, which was tenanted and double glazed. Imagine

:24:01.:24:05.

his surprise when I told him that there was no roof, it had a car

:24:05.:24:09.

half in and half out of the back kitchen and the house was in a

:24:10.:24:13.

state of devastation. During the period when the investor

:24:13.:24:16.

owned it there was an incident reported and when the investor went

:24:16.:24:20.

to see it, they found that it was completely burnt out.

:24:20.:24:24.

PPP had been buying streets of run- down properties like this one for

:24:24.:24:28.

investors and doing nothing with them. This affected whole

:24:28.:24:31.

communities nearby who weren't involved with their scheme.

:24:31.:24:35.

It is bad bad enough areas where there is nobody living there, when

:24:35.:24:39.

you have got people who lived in these areas for years, they end up

:24:39.:24:44.

living in a bomb site. If PPP weren't spending investors

:24:44.:24:53.

money on renovating properties, where had the money gone. As this

:24:53.:25:02.

was a criminal matter, Mark was determined to find out.

:25:02.:25:08.

He seemed to enjoy being the centre of attention. He described him as

:25:08.:25:10.

not the richest man in the north- east.

:25:10.:25:15.

He pays his staff very well, but for want of a better word expects

:25:15.:25:24.

his pound of flesh and is There are scams out there for every

:25:24.:25:27.

one of us. It doesn't matter how old you are, what you do, where you

:25:28.:25:32.

live. There is one that's tailor- made for you. The point is this -

:25:32.:25:37.

how do you recognise a scam and how do you avoid falling into their

:25:37.:25:41.

traps? We have spoken to some of the UK's

:25:42.:25:45.

leading authorities on fraud to build up a picture of what type of

:25:45.:25:49.

person falls for what type of scam and we have created fictional

:25:49.:25:59.
:25:59.:26:02.

Today's character is a young lad looking for work and like many

:26:02.:26:07.

people in the UK, he is using the internet to help.

:26:07.:26:11.

When people are applying to jobs online they can be vulnerable

:26:11.:26:15.

depending on how urgently they need to find employment.

:26:15.:26:19.

That makes our job hunting youth the prime target for the dream job

:26:19.:26:27.

scam. Here is how it works and why.

:26:27.:26:32.

Our young chap puts his CV on a number of online job websites,

:26:32.:26:35.

advertising his background and credentials as a future employee,

:26:35.:26:39.

but little does he know, he is handing valuable information to

:26:39.:26:44.

scammers as well. He made himself vulnerable by doing

:26:44.:26:54.
:26:54.:26:54.

something perfectly sensible and legitimate by putting his CV on a

:26:54.:27:00.

website. The scammer can get hold him and field him a line because of

:27:00.:27:03.

his skills and because of where he is in his life. He has dealt them

:27:03.:27:11.

the cards in some sense. He may also have included crucial

:27:11.:27:15.

personal information such as his date of birth, national insurance

:27:15.:27:19.

number and address in a bid to land a job fast. So our young lad is

:27:19.:27:27.

making it easy for the scammers to assess his suitability.

:27:27.:27:32.

So one day, he gets a telephone call. It is really like a phone

:27:32.:27:36.

interview and the job sounds attractive, it involves a lot of

:27:36.:27:41.

travelling. It involves the sorts of skills that he has got, you know,

:27:41.:27:45.

really by the end of this conversation which came out of the

:27:45.:27:51.

blue he is feeling that this is a job he had he would really like and

:27:51.:27:55.

he is feeling good about himself because they took the trouble to

:27:55.:28:00.

contact. Our chap is desperate. Wooed by the

:28:00.:28:02.

sudden and exciting offer, he has been caught off guard. He hasn't

:28:02.:28:06.

stopped to think about the fact that attractive jobs rarely come

:28:06.:28:08.

out of the blue and he hasn't questioned the fact that he was

:28:09.:28:16.

cold called. Having missed all the marks of the

:28:16.:28:23.

scam, our lad is unwitting put himself in a seriously vunnable

:28:24.:28:27.

vulnerable situation. The next day, or a few days later

:28:27.:28:32.

our victim gets another call and what she says is, "Congratulations,

:28:32.:28:35.

you have got the job." She goes into more detail about what we have

:28:35.:28:41.

got to do and the first thing is to have a placement in some exotic

:28:41.:28:46.

foreign country, one he has never been to before and unfortunately,

:28:46.:28:51.

the firm can't get him his visa, but they can manage all the

:28:51.:28:59.

processing for him if he can just send them the �200 or �500 or

:28:59.:29:02.

whatever it is, the sort of scale that someone in his position would

:29:02.:29:07.

be able to put their hands on, though not easily and he is never

:29:07.:29:14.

going to see it again. So our chap has has innocently

:29:14.:29:18.

handed over whatever cash he has in a bid to get on with his life and

:29:18.:29:23.

the fraudsters have probably sold his details on to other scamming

:29:23.:29:28.

websites. So keen was he to gain independence, he has done what many

:29:28.:29:32.

young people risk doing. He has put too many personal details on job

:29:32.:29:37.

websites. He has been fooled with the promise of an exciting career.

:29:37.:29:42.

He has paid upfront fees on the back of a cold call. So if you or

:29:42.:29:46.

anyone close to you is in a similar situation, this is what you need to

:29:46.:29:56.

know: Reputable companies have advice on

:29:56.:29:59.

their website about security and. If you are in doubt about an advert

:29:59.:30:03.

that you wish to apply for, you can contact the service provider that's

:30:03.:30:06.

advertising the job. Think about your preferences and settings on

:30:06.:30:11.

your profile that you have online. You can choose to keep your e-mail

:30:11.:30:14.

and phone numbers confidential from recruiters.

:30:14.:30:19.

Remember, scams are designed to target people of all ages and

:30:19.:30:22.

backgrounds so stay on your guard and hopefully you won't be their

:30:22.:30:32.
:30:32.:30:36.

The early noughties and UK property is booming with little sign of bust.

:30:36.:30:46.
:30:46.:30:54.

It was in this economy that that prk that PC PC that a company

:30:55.:31:03.

company pulled off a scam. PPP had been promising investors for

:31:03.:31:07.

�25,000, they would buy them a run- down property, do it up and rent it

:31:07.:31:12.

out on their behalf. After a tip- off, Detective Mark Woods

:31:12.:31:18.

investigated and found they weren't honouring their promises. This

:31:18.:31:23.

house here is probably typically of a house that PPP would buy for an

:31:23.:31:26.

investor. As soon as they bought the house this is what they ended

:31:26.:31:32.

up, a house that was boarded up and derelict. The vandals have gone in.

:31:32.:31:37.

It would remain like this because they didn't have the money to do

:31:37.:31:42.

the refurbishments. You get two or three houses like this, and the

:31:42.:31:45.

area comes into decline and you are left with a shell.

:31:45.:31:49.

Where was investors money going? With the help of the Department of

:31:49.:31:52.

Trade and Industry, the police forced PPP to stop trading and

:31:52.:31:57.

conducted a series of raids on the offices and homes of senior staff.

:31:57.:32:02.

From our point of view, it is important that we seize everything

:32:02.:32:07.

as soon as practicable. We didn't want to lose anything.

:32:07.:32:10.

Searching through the company records and seeing how many people

:32:10.:32:14.

had been taken in, Mark realised he needed help.

:32:14.:32:19.

As a force, it was the largest fraud inquiry that the force has

:32:19.:32:23.

taken on. We didn't have the resources, we referred it down to

:32:23.:32:27.

the Serious Fraud Office and they came on board and basically ran the

:32:27.:32:30.

operation in conjunction with ourselves.

:32:30.:32:34.

Put in charge of the case, Kay Rogers at the SFO was taken aback

:32:34.:32:39.

by the size of the fraud. I have not come across another case

:32:39.:32:43.

where we had so many individuals who were actually victims to such a

:32:43.:32:50.

large degree. There was In secretaries in excess of 1700

:32:50.:32:53.

victims and they paid to the company what appeared to be a total

:32:53.:32:57.

of �80 million. As the police drove around the

:32:57.:33:00.

country, interviewing victims, they found this was not a case of the

:33:00.:33:04.

rich robbing the rich, many of those caught out were ordinary

:33:04.:33:08.

people. It wasn't just a case of investors

:33:08.:33:13.

losing money and they are losing money by investors can be a

:33:13.:33:17.

calculated risk by them, this was people's livelihoods and life

:33:17.:33:21.

savings and it was tragic to see what happened to them and the

:33:21.:33:23.

effect it has on them. That's probably the thing that will stick

:33:23.:33:26.

with me most. Many of the victims of this scam

:33:26.:33:29.

were left too crushed and embarrassed to talk about their

:33:29.:33:35.

involvement. Nancy Lewis was tricked into paying PPP �50,000 for

:33:35.:33:38.

two properties that turned out to be worth far less when she saw the

:33:38.:33:41.

state they were in. It sounded like a really good

:33:41.:33:46.

scheme because it was look to go put something back into the area

:33:46.:33:49.

through regeneration. She had saved that money over a long period of

:33:49.:33:53.

time. It was precious to her. It was pretty much all the savings

:33:53.:33:57.

that she had. She put that wholeheartedly into something she

:33:57.:34:05.

believed in. There was a puzzle to solve. PPP

:34:05.:34:08.

had been running this scam for three years, yet it was only now it

:34:08.:34:12.

had been discovered. Although most of their investors lived away from

:34:12.:34:17.

the area, how had they got away with it for so long? Police

:34:17.:34:20.

interviews can company employees and an examination of the accounts

:34:20.:34:24.

would provide the answer. To start with, the scheme was

:34:24.:34:28.

perfectly viable, however it became far more difficult to identify

:34:28.:34:31.

properties that were of a sufficient quality that could be

:34:31.:34:35.

refurbished and tenanted as envisaged by the scheme. That

:34:35.:34:38.

didn't deter the company. They continued to sell because they were

:34:38.:34:41.

so enthralled by the amount of money coming in and it was the fact

:34:41.:34:46.

that the properties would cost a lot more money to refurbish that

:34:46.:34:49.

really undermined the whole scheme. They weren't prepared to spend the

:34:49.:34:54.

money. P PPP tried to cover their tracks

:34:54.:34:58.

in a pyramid scheme. Money from new investors was used to pay the rents

:34:58.:35:02.

to existing ones. And that's what keeps pulling in the new investors

:35:02.:35:07.

because the earlier investors see it as a successful investment.

:35:07.:35:14.

rental income was put in their bank account from the PPP account. Those

:35:14.:35:18.

people didn't know what they had until the company went under so

:35:18.:35:23.

they came back to these houses thinking, "OK, I have got to look

:35:23.:35:26.

after the house myself. I have a tenant that I'm receiving an income

:35:26.:35:34.

and found this.". When they were closed down, PPP had around 100

:35:34.:35:38.

employees, most of whom had no idea the company was rotten to the core.

:35:38.:35:42.

Rooting out who the real bad guys were and bringing them to justice

:35:42.:35:45.

was a major challenge for the Serious Fraud Office.

:35:45.:35:49.

We interviewed over 300 victims so we talked to them about the

:35:49.:35:53.

investment that they made, their contact with the defendants and we

:35:53.:35:56.

looked at the documents that they retained so that was able to show

:35:56.:36:02.

us was who they had spoken to and how they were misled and the

:36:02.:36:04.

information that they were given that persuaded them to invest in

:36:04.:36:11.

this scheme. From the company itself, PPP, the liquid dator gave

:36:11.:36:15.

us the records and that amounted to 600 archive boxes which is a huge

:36:15.:36:20.

volume of material to have to read through, to analyse and to assess

:36:20.:36:22.

its relevance. With so many victims and pieces of

:36:22.:36:27.

evidence to wade through, it was a complicated case, but four years

:36:27.:36:32.

later in 2007, the SFO were finally ready to prosecute.

:36:32.:36:39.

We charged five people. Those five people were app all

:36:39.:36:43.

directors of the company and crucially they all attended board

:36:43.:36:48.

meetings where they discussed the situation. They all knew there was

:36:48.:36:51.

less than 40% of the properties tenanted. They knew there was not

:36:52.:36:56.

enough money spent on refurbishments and they were

:36:56.:37:00.

generously paid, far more so that could be justified by the income

:37:00.:37:04.

that the company generated. While they left nearly 2,000 people

:37:04.:37:09.

to pick up the pieces, the directors had been living it up, in

:37:09.:37:13.

particular company boss, John Potts who had. A nice big housepm Luxury

:37:13.:37:20.

items. Fine art. He He liked expensive

:37:20.:37:27.

suits. He seemed to enjoy being the centre of air tension and he --

:37:27.:37:34.

attention. He Jaguar which he was renovated. He ruled his

:37:34.:37:41.

organisation with an iron fist. There is two sides to Mr Potts,

:37:41.:37:44.

there is the side that you can meet and he is affable and there is a

:37:44.:37:49.

side when necessary charge of staff which is -- when he is in charge of

:37:49.:37:57.

staff. We found him quite bullying and inTim daght and pays --

:37:57.:38:00.

intimidating and pays his staff well, but expects his pound of

:38:00.:38:06.

flesh, but is an intimidating man. But his chickens were about to come

:38:06.:38:11.

home to roost. On the eve of their trial in early 2009, the fraudulent

:38:11.:38:18.

five decided to plead guilty. It didn't need anybody standing up

:38:18.:38:21.

in court and trying to explain that to a jury, it really meant that

:38:21.:38:25.

anybody looking at the results of all that work that we had done, it

:38:25.:38:30.

was clear they were guilty. All the directors received prison

:38:30.:38:34.

sentences and John Potts was jailed for five years.

:38:35.:38:38.

The SFO haven't stopped there. To claw back money for investors, they

:38:38.:38:43.

have begun a process of digging out any loop the crooks may have buried.

:38:43.:38:47.

We need to look at the assets they have acquired. Sometimes trace them

:38:47.:38:50.

through shell companies and other nominee owners, particularly where

:38:50.:38:55.

it comes to property and shares and sometimes things are hidden really

:38:55.:38:58.

effectively so we have to do a major tracing exercise.

:38:58.:39:02.

One thing is for sure, John Potts is no longer the richest man in the

:39:02.:39:06.

north-east and that's some comfort to the hundreds of people conned in

:39:06.:39:11.

this massive scam, including Ed, whose mother Nancy handed over

:39:11.:39:17.

�50,000 to PPP. It makes me really angry that that these people were

:39:17.:39:21.

so arrogant, they feel they can get away with this. If they can spend

:39:21.:39:25.

people's money that they have been saving all their lives, that no one

:39:25.:39:28.

would do anything about it. I'm delighted that they have been put

:39:28.:39:35.

behind bars. They deserve it. They are scumbags, these people. They

:39:35.:39:39.

have got no conscience. Nancy died in 2008, but before she

:39:40.:39:46.

did, she was able to recoup her losses and help the area by doing

:39:46.:39:55.

up her PPP houses. She came out of this with her her

:39:55.:40:00.

head held high. She She managed to achieve something and I'm really

:40:01.:40:10.
:40:11.:40:18.

proud of her for that. Before I go today, I want to know

:40:18.:40:23.

some of the latest scams out there now, I will be speaking to an

:40:23.:40:25.

expert from the National Fraud Authority on what to watch out for.

:40:25.:40:35.
:40:35.:40:42.

Utilities, they are straightforward, they give you what you need to live

:40:42.:40:47.

and you pay the the bills. Surely you can't get scammed.

:40:47.:40:51.

Unfortunately as technology moves on, for instance with the

:40:51.:40:54.

electricity companies, we have prepayment meters with a card that

:40:54.:40:57.

you insert that gives you the credit. Unfortunately the

:40:57.:41:01.

fraudsters have got hold of this and they are scamming the poorest

:41:02.:41:05.

in our society again. How does that work? They are

:41:05.:41:10.

calling door to door and selling you a card to get free electricity.

:41:10.:41:15.

The card is either bogus or the money that has been used to top it

:41:15.:41:21.

up has been topped up using a stolen or cloned credit card. When

:41:21.:41:26.

the payment for that card bounces, the card doesn't work.

:41:26.:41:30.

You are charged by the utility company for the electricity that

:41:30.:41:35.

you have used that hasn't been paid for. So you end up paying twice?

:41:35.:41:39.

You pay pay twice. An electricity company will never

:41:39.:41:42.

sell you any payment card on the door, even if the amount on the

:41:42.:41:47.

card looks tempting, remember it is stolen money and you will end up

:41:47.:41:51.

paying twice. OK, so if I get a message from my

:41:52.:41:56.

utility, utility company company saying there is money waiting for

:41:56.:42:00.

you, what's the reality behind that? You will contact them. You

:42:00.:42:05.

will phone them. There could be a premium rate phone number involved

:42:05.:42:09.

in which case it it costs you a lot of money to get nowhere in an

:42:09.:42:12.

information stream. When you phone up, you will be put on hold and

:42:12.:42:17.

after two or three minutes, having spoken to no one, when you hang up,

:42:17.:42:21.

you will find that that phone call has cost you a lot of money. That

:42:21.:42:27.

is one scenario. The other sin scenario is they will ask you for a

:42:27.:42:31.

fee to facilitate the France fer of the funds that -- transfers of

:42:31.:42:36.

funds that never arrive. Refunds do happen, but a utility

:42:36.:42:39.

company will never ask for a fee to process one. Any refund will be

:42:39.:42:43.

taken off a future bill. Someone telling you different? Well, don't

:42:43.:42:49.

believe them. Con men will keep coming up with

:42:49.:42:54.

Matt meets Caroline, who spent 15 years and thousands of pounds studying psychology and then faced the devastating news that her course had been a con and her qualifications were worthless.

Plus, how the authorities banged up a buy-to-let conman who duped investors out of £80 million, and the scam that targets people looking for their dream job.


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