Matt Allwright uncovers sophisticated scams. Matt meets a hard-working floor layer whose desire to provide for the future put him at the mercy of a stock market scammer.
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Each year, half of Britain is targeted by some kind of scam
and the brains behind these scams are quick-thinking conmen
who know every trick in the book to get you to part with your cash.
Coming up, the share-selling scam that will give you more
than your fair share of misery.
It's a massive loss. We're never going to regain it. It's as good as my life savings.
And the Olympic ticket fraudsters who stole millions.
In terms of selling tickets, the scam that Exclusive undertook was the most sophisticated I'd ever come across.
I'm here to tell you what the conman doesn't want you to know -
how to stay one step ahead of the game and not get scammed.
The art of investing is balancing risk against reward.
That is the risk of losing your money versus the size of the return you're going to make.
If someone can offer you an investment that has a massive return, but is a dead cert,
with no danger whatsoever, why would you say no?
Because it will almost certainly be a con and the world of stocks
and shares is a breeding ground for crooks who want to steal your cash.
A boiler room scam, also known as a share scam,
is when a fraudster pretending to be a stockbroker tries to sell you
shares that are either worthless or non-existent.
It's been going on since the 1930s when dishonest firms would
hastily set up in the basement, or boiler room, of existing buildings.
But, as the Financial Services Authority hears all too often,
this type of fraud is still robbing us in large numbers.
The size of the boiler room problem is always difficult to estimate.
We see £20 million of loss every year
and 1,000 people losing about £20,000 each
which itself is a shocking figure.
Worse than that, that is clearly the tip of the iceberg.
It's reckoned that only 10% of people affected
by boiler scams come forward to talk about what's happened to them
as most are too ashamed or embarrassed.
It can be hard to admit you've been scammed.
I think I'm about to meet someone who knows how that feels.
-Hi, Matt. Come on in.
29-year-old Carl has recently been left devastated after being ensnared by a cruel, devious scam.
Losing vast sums of money and his most treasured possession
along the way, it's an extremely painful story for him to tell
but he wants to prevent others being caught out the same way.
Carl, what's your job? What's your speciality?
I'm a floor layer in the retail trade. Shop fitting, mainly, we do.
All over the country, as far as Northern Ireland.
Laying floors is back-breaking. Carl gets on his hands and knees
for every penny he's earned.
But throughout the long days and weeks away,
he was spurred on by the thought of saving enough to buy his dream car.
My uncle's a mechanic.
He used to bring different cars round to my house every week.
I suppose that's how I got into it as a little boy.
And Carl set his heart on owning the car his uncle had once driven.
He had a 911 back when I was six years old and ever since I went in it, that was my dream car.
That was my goal in life really.
A few years ago, Carl finally got enough money together to buy that car.
A lot of people would be watching this and thinking, "Carl's got a Porsche - he's rich."
Is that the way it works?
I wish! I work 16-hour days, seven days a week.
It's not often I get time off to enjoy what I like most.
A Porsche, there you go. I'd come home and like to take it out
cos I'd been away from home for three weeks at a time.
It's nice to get back and enjoy something.
And that's your big passion.
At the time, Carl thought nothing could separate him from his beloved motor,
but then a friend got him interested in the stock market.
A work colleague put his phone number into a search engine, people looking to buy cheap shares.
He's given his number to an internet site which is saying,
if you're interested in shares, you wanted to get started.
A penny shares website, I believe it was.
Then got inundated with phone calls from various brokers.
There are firms that don't approach the FSA and say, "We want to be a stockbroker,"
such as boiler rooms. They operate on the fringes.
They steal their money by pretending to be mortgage advisers,
investment advisers or stockbrokers of different sorts.
There was one that stuck out that seemed like a sure bet.
A work colleague checked the company on the internet, looked on the FSA register.
It seemed they were all registered as well.
But what Carl's colleague didn't know was that the company
he was speaking to were almost certainly impersonating
a legitimate firm who were on the FSA register.
This is known as cloning and can easily fool people into thinking
they're dealing with a proper company.
It's all part of giving a veneer of authenticity
to what's really a con.
And this supposed broker who'd called Carl's friend
said that he had a great offer going
on some shares in the oil exploration industry.
I took a tip off the guy. I watched it for a week, two weeks.
The initial stages, they don't try and make a sale.
It sounds odd, but it's to show they're not trying to get you to buy something you don't want.
They want you to want it first. One way is to name a few companies that they're promoting.
When they speak to you another time, they'll tell you how those companies have done.
They'll only refer back to the ones that have done well and it makes it sound like they're great stockbrokers
and they're giving great advice,
but really they're choosing a few companies
that have done well in the past few weeks.
So far Carl and his friend had avoided temptation,
but true to form, this broker told them
to watch the progress of some more shares he was tipping.
Sure enough, when they looked them up on an independent stock exchange website,
the results were impressive.
He was telling the truth, it seemed.
We watched them on the stock market and the price kept going up and up.
The next time he called, he said, "You missed out on them,
"but don't worry. I've got these ones you can invest in. These are going
to do the same thing, but you need to buy these this afternoon."
Carl's friend took the plunge first and sent some money for the man to buy shares on his behalf.
And then watched as their value on the market continued to rise.
It wasn't good to see him make loads of money and profits. I wanted a bit of that.
He forwarded my number onto the broker that was dealing with it at the time.
Within a couple of days, I received a call off the guy.
These early phone calls are all about engaging in conversation,
building up this false sense of trust
that the boiler room conmen are so expert at doing.
The charm offensive worked and Carl quickly felt confident enough
to invest his own hard-earned cash.
He transferred £3,000 into what he thought was the bank account of a bona fide stock broking firm.
I put the 3,000 in. By the same afternoon, it was worth 9,250.
Carl had recently remortgaged his house so he had money
available to invest. Over the next few months, he sent more
and more money to his broker to invest in different shares.
Until he had spent £12,000 in total.
He wasn't worried.
The value of his shares was rising on the stock market
and to prove he owned them his broker had sent him some certificates.
It would be difficult to reveal a con by looking at a certificate.
Share certificates look different for different companies and for different types of people that you deal with.
Part of the reason the con is so successful is that people invest in shares for medium or long-term.
They might not start to worry about it until the day comes,
perhaps many years after that, when they want to get their money out.
Carl's broker phoned saying he had some more shares that were a sure thing
and asked if he had any more funds.
Carl said he had no money left, but let slip he owned a Porsche.
It was almost as if he had his teeth into me then.
As soon as he knew I had the capital sitting there, that was it, he wouldn't let go of me.
The broker talked up the potential profits
and Carl knew it would take years and years of working
to get that kind of money.
Finally he was coaxed into putting his dream car up for sale.
Having worked so hard to get it,
Carl eventually sold his pride and joy for £27,000,
and prepared to put £20,000 of it into his broker's bank account for new shares.
Carl sent the money. He'd now shelled out £32,000 in total.
And while all this was going on, Carl's work friend,
who'd been the first to get involved, had decided to sell his shares.
He asked the broker to send through the money once this was done and then went on holiday.
But two weeks later he phoned Carl with some worrying news.
Our work colleague was back and he still hadn't received any money
from the shares that were supposedly sold on his behalf.
That was it then, alarm bells started ringing.
And whereas previously he used to be on the phone pretty much every day,
Carl's broker was now, strangely, hard to get hold of.
It was just like they were folding the shop up, one bit at a time.
Struck off the FSA register that we found, the internet page disappeared,
and then last of all, the phone number didn't ring through any more either.
All you need to operate a boiler room, infrastructure wise, is a telephone that works
so they can easily shut down.
Carl had been given a London address for his broker.
It was only when he travelled down from Northamptonshire to check it out that he learnt the bitter truth.
There was no sign of anybody. It was as though they had never even been there.
All we could do was come home, upset.
Work on, and try to get on with life the best you can really.
-You've realised, obviously, by now, that you've been scammed.
What effect has that £30,000 had on you?
Well, a big struggle, to be honest.
It's a massive loss. I'm never going to regain it, ever.
It's as good as my life savings,
let alone 10,000, my girlfriend's inheritance she received,
she put towards the Porsche as well.
I feel indebted to her a little bit now as well.
It's had a strain on our relationship.
It's just ridiculous what these people can get away with.
-You've got to work towards something.
-Whether it's a family, or whether it's a car
-or a house or whatever it is, we give ourselves goals to work towards.
-Yes, keeps us going.
-You know? It's very difficult to say no when it's there on a plate.
It's very easy for people to judge, but, if they're in the same situation,
they'd have to be sure they wouldn't do the same thing.
Carl's certainly not alone in getting conned by a boiler room scam
but he is one of very few with the courage to come forward about it.
We really need people's help. We can, even off one phone call, manage to catch people who run boiler rooms.
We manage to freeze assets and get money back to victims on occasions.
I feel sorry for you because I know how much hard work
30 grand represents, doing what you're doing.
I'm glad I was young enough to take it on the chin,
rather than some old people that get taken in for the con,
they take their life savings.
At least I've got many years in front of me to try and recoup that.
The discussions you've had with your girlfriend, how did they go?
It was more or less as if she said, "I told you so," but she was understanding.
We didn't fall out too much over it, to be honest.
She was there for me when I needed her the most, and that's all that matters in life really.
-Money comes and goes, unfortunately.
-A tough lesson.
-Thanks for sharing it. Cheers, Carl.
So, when the scam artists can be this cunning, how can you protect yourself
against becoming a victim of a boiler room fraud?
If it's a call out of the blue, a cold call,
then there's a chance it's not an authorised firm
because a proper authorised firm shouldn't be cold calling customers,
so be very wary.
The next thing to do, if you're tempted to deal, is to do some basic research.
Any firm offering financial services should be known to the FSA
but of course there are scammers who impersonate FSA-registered firms.
If someone claims to be calling from an authorised firm, they might be lying.
They're conmen after all,
so you've got to check you're dealing with the proper authorised firm.
The best way to do that, do a bit of research.
Call that firm back yourself on their switchboard number.
If you go online, it's easy enough these days to find firms
willing to sell you tickets for big events, sports or music.
What's more difficult, though, is guaranteeing those firms
will still be there when it's time to collect your tickets.
I think I'm early.
The selling of fake or counterfeit tickets is one of the oldest scams on the block.
Whether it's a music festival, a football match or even a world class event like the Olympics,
anything that needs a ticket provides an excellent opportunity for scam artists to steal your cash.
And it's not just customers who lose.
Festival promoter and chairman of Wembley stadium, Melvin Benn, has seen the damage that conmen cause.
It's a significant problem. It takes millions of pounds out of the industry every single year.
Big ticket events that sell out quickly are what scammers really like.
The way that they look at trying to do that, really,
is by pretending that they have tickets to desperate fans.
When fans are desperate, they're desperate. I mean, they'll do anything to get a ticket.
If you're desperate, crikey, it's really easy to be manipulated.
May 2011, and a massive trial is under way at Southwark Crown court.
The main men of a company called Xclusive Leisure and Hospitality Limited
stand accused of selling thousands of fake tickets to music festivals and the Beijing Olympics in 2008.
It's taken three years to bring them to justice, after a massive investigation
by Simon Daniel's team from the Serious Fraud Office.
They basically sold £5 million worth of tickets and not supplied one.
The scam that Xclusive undertook was by far the most sophisticated I have ever come across.
Clive's just one of the many people who ended up suffering
at the hands of Xclusive,
when he bought tickets through them for himself and his three children
to go and see the Beijing Olympics.
It probably seems the trip of a lifetime.
We were going to do the trans-Siberian express, Outer Mongolia and China, five weeks away.
Clive had originally planned to take the rail journey for his honeymoon back in 1995.
However, I got headhunted just before I got married
and it was my wife's decision that we couldn't go away for five weeks.
I had to stay here and help set up the company.
It was therefore something we were aiming to do in the future.
However, my wife died in 2002 so we were unable to do it together.
Two years after his wife's death, Clive decided to take his honeymoon holiday with his children instead.
The highlight of the trip would be tickets to the 2008 Beijing Olympics
but he found it difficult to get them through the official outlets.
I could only go to the secondary market, so you go online and you have all these websites.
And the website of Xclusive Leisure and Hospitality Limited,
that was offering Olympic tickets, caught Clive's eye.
Well, it had, you know, all the logos. It had everything on there, it was fairly easily accessible.
It seemed to be professionally done.
I was able to pay with my credit card online.
There was also a number he could ring.
I was able to talk to people as well as go onto the website.
-They put my mind at rest.
-And the price of the tickets?
I paid probably just over £2,000 in total,
quite a bit above the face value. As it was the secondary market,
I understood the fact they had to make a bit of money
and they were also based in London, so I thought, if I did have a problem,
at least there's an address I could go to. I was quietly confident.
But his confidence turned out to be badly misplaced.
As soon as I made the payment, the website went down, the phone line went down.
I went to their office in south-east London, no-one there.
I couldn't get... There was nothing.
Clive wasn't alone - thousands had been caught out
and the authorities were beginning to get a sniff of the affair.
Xclusive tickets shut down on 4th August, the week before the Olympics.
Obviously at that point there were a lot of complaints in to Trading Standards,
relating to the non-supply of tickets.
For people like Clive and his young family, it wasn't just money they felt cheated out of.
It was the thought of missing the once-in-a-lifetime chance of being at the Games.
I got stung by this company, at what I saw was pretty much the last minute.
It was easy to see how Clive and many others had been drawn in.
On a small scale, Xclusive had been trading legitimately for over a year,
selling real tickets to football matches and sporting events such as Wimbledon.
They'd built a decent reputation on internet forums and message boards.
But Xclusive were playing the long game for big money.
They had a long-term plan.
They set up as a legitimate business with the absolute intention of, once the Olympics came along,
knowing that the demand for the Olympic tickets would be so great,
flip that into a crooked business that they would just cash in.
And by God, they cashed in.
One of the main men behind Xclusive - Terry Shepherd - had previous in this sort of thing.
He'd been at three companies that had flogged a load of tickets for major events
and then folded just before they were about to start.
Banned from running a company again, here he was working at Xclusive
as, ahem, a consultant, alongside the named director Allan Scott.
This time the pair had blamed their company's collapse on the fact
another firm called Peter's Ticketing, run by a Ricky Smith, had run off with all the money.
So it was key to our investigation to show that was a fabrication and that Peter's Ticketing
and Ricky Smith were a figment of Shepherd and Scott's imagination.
To do that, Simon's team at the Serious Fraud Office
needed to search the homes of Shepherd and Scott,
as well as the offices of a new company the pair had set up
called the Online Ticket Exchange.
But first, they needed a judge to grant them search warrants.
And everything had to be kept hush-hush.
We didn't want to tip off the individuals
that we were investigating because materials could go missing,
so it's important for that period to keep our name out of the press,
out of their attention.
With the judge needing strong reasons
to grant a search warrant, Simon called on the help of a department
at the Insolvency Service -
the Companies Investigation Branch, or CIB.
They were due to visit Shepherd and Scott at their new offices
to discuss Xclusive's liquidation.
Simon asked them to do some investigation on the SFO's behalf
in the hope that the crooks would be caught off guard.
They'd dealt with CIB in previous companies
and they'd never been prosecuted,
other than being disqualified as directors,
so I don't think they were too concerned
about those investigations.
On their visit to Scott and Shepherd's offices,
the CIB noticed that they had brought some of Xclusive's computers
and documents along with them.
They also took a screen capture of the pair's new website
which proved they were illegally selling tickets.
The judge granted the search warrant
and the Serious Fraud Office led a series of coordinated raids,
uncovering a treasure trove of evidence
that blew the murky dealings at Xclusive wide open.
Scott, who's meant to be the director of the company,
lived in rented accommodation in Essex,
and Shepherd lived in a multi-million-pound house in Blackheath,
filled with jewels and evidence of substantial holidays
and overseas properties.
When we saw that, it just brought home our suspicion
that this was run by Shepherd, not Scott,
and that Scott was a front man.
They also seized invoices
that apparently came from Peters Ticketing
the firm Xclusive claimed had run off with all the money.
And the information on these invoices meant Simon's team
could start to dispel the illusion of Peters Ticketing
being an actual company.
First off, they checked the address.
That turned out to be a post office box facility
and Peters Ticketing was effectively just a box
a foot long and ten inches wide.
A guy called Peter had been paid £100 in a pub.
He used his bank account,
there was no monies going through the bank account,
so a major company with no bank account.
And the final nail in the coffin for Peters Ticketing
were the invoices themselves.
This is one on the right, supposedly sent to Xclusive.
It's very basic, not a lot of information on the invoice.
The one on the left was sent to a completely different company -
same date, different invoice number,
different style, individual numbers of tickets, there's a grid system.
If Peter's ticketing had been a real company
then these two invoices sent on the same day would have had an identical style with similar numbers,
rather than being completely different.
The SFO now had their case.
The next thing was actually to charge the individuals,
so we charged them in October 2009,
so barely 12 months after we took on the investigation.
The main men behind Xclusive Leisure & Hospitality Limited
were finally brought to the dock in May 2011.
Company accountant Allan Schaverien was jailed for...
Company Director Allan Scott was jailed for...
And company - ahem - consultant Terence Shepherd
was sentenced to eight years in the big house.
The trial judge's closing comments
displayed his very dim view of the trio's actions.
"It's a massively cynical and utterly dishonest confidence trick
"which is motivated by greed.
"Shepherd, you've clearly received the lion's share of the money.
"When you needed it, you took it.
"It was blown on a catalogue of excess,
"including the extraordinary expenditure of your wife."
And no tears were shed by people like Clive,
who had been cheated into paying for fake tickets
by Shepherd's fraudulent company.
It just wasn't right.
I'm quite pleased that these people are going to jail, actually,
because they shouldn't be allowed to do things like this.
In the end, Clive was one of the lucky ones.
He was able to claim back the £2,000 pounds he'd lost
thanks to his credit card insurance.
And when he and his three children went on their trip to China,
they managed to get into the Games after all.
For more information and advice
on protecting yourself against the scammers, go to...
Now, before we go today,
I want to find out about two of the latest scams
that are doing the rounds right now.
An expert from the National Fraud Authority
is going to fill me in on the details
and today's subject is holiday scams.
OK, let's start with time-share. I thought that was from
the '80s and '90s, people taking the mickey with time-shares.
I think traditional time-share has cleaned up its act
and there has been legislation,
but the crooks who used to sell time-share
have been very inventive in producing new types of products.
Something called fractionals, where they say,
"It's a not a time-share,
"but you actually own part of the property
"and then you have a number of weeks."
This is where you're actually buying a portion,
a tiny portion of a bigger property, is that the way it works?
Yeah. It sounds like it's an investment
as well as a place to have your holiday.
Problem is, you sign the small print and you actually don't own that.
Don't be hassled into signing
anything to do with foreign property.
Now - another holiday scam...
Changing money - how on Earth can you be scammed that way?
Someone will pop up and say, "D'you need your money changed?"
Sometimes, they can look official, so they can be police officers
or someone who pretends to be a police officer, so you get over that trust,
you feel you need to change the money, but how do you know what the currency looks like,
how do you know what the exchange rate is?
It's very easy to get scammed in those circumstances.
'To change money abroad, use an official bureau de change.
'Failing that, keep a ready reckoner of the exchange rate
'to avoid getting ripped off on the street.'
Scammers will keep coming up with new and devious ways
to get hold of our cash but, armed with a little bit of knowledge,
you can be one step ahead.
Stay safe - I'll see you next time.
Subtitles by Red Bee Media Ltd
Matt meets hard-working floor layer Carl, whose desire to provide for the future put him at the mercy of a stock market scammer. Plus the story of the conmen who were put behind bars after selling-non existent tickets to events including the Beijing Olympics, and scams to look out for on holiday.