Share Scam You've Been Scammed


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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Transcript


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Each year, half of Britain is targeted by some kind of scam

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and the brains behind these scams are quick-thinking conmen

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who know every trick in the book to get you to part with your cash.

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Coming up, the share-selling scam that will give you more

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than your fair share of misery.

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It's a massive loss. We're never going to regain it. It's as good as my life savings.

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And the Olympic ticket fraudsters who stole millions.

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In terms of selling tickets, the scam that Exclusive undertook was the most sophisticated I'd ever come across.

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I'm here to tell you what the conman doesn't want you to know -

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how to stay one step ahead of the game and not get scammed.

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The art of investing is balancing risk against reward.

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That is the risk of losing your money versus the size of the return you're going to make.

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If someone can offer you an investment that has a massive return, but is a dead cert,

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with no danger whatsoever, why would you say no?

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Because it will almost certainly be a con and the world of stocks

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and shares is a breeding ground for crooks who want to steal your cash.

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A boiler room scam, also known as a share scam,

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is when a fraudster pretending to be a stockbroker tries to sell you

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shares that are either worthless or non-existent.

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It's been going on since the 1930s when dishonest firms would

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hastily set up in the basement, or boiler room, of existing buildings.

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But, as the Financial Services Authority hears all too often,

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this type of fraud is still robbing us in large numbers.

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The size of the boiler room problem is always difficult to estimate.

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We see £20 million of loss every year

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and 1,000 people losing about £20,000 each

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which itself is a shocking figure.

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Worse than that, that is clearly the tip of the iceberg.

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It's reckoned that only 10% of people affected

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by boiler scams come forward to talk about what's happened to them

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as most are too ashamed or embarrassed.

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It can be hard to admit you've been scammed.

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I think I'm about to meet someone who knows how that feels.

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-Hello, Carl.

-Hi, Matt. Come on in.

-Cheers.

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29-year-old Carl has recently been left devastated after being ensnared by a cruel, devious scam.

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Losing vast sums of money and his most treasured possession

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along the way, it's an extremely painful story for him to tell

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but he wants to prevent others being caught out the same way.

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Carl, what's your job? What's your speciality?

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I'm a floor layer in the retail trade. Shop fitting, mainly, we do.

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All over the country, as far as Northern Ireland.

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Laying floors is back-breaking. Carl gets on his hands and knees

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for every penny he's earned.

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But throughout the long days and weeks away,

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he was spurred on by the thought of saving enough to buy his dream car.

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My uncle's a mechanic.

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He used to bring different cars round to my house every week.

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I suppose that's how I got into it as a little boy.

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And Carl set his heart on owning the car his uncle had once driven.

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He had a 911 back when I was six years old and ever since I went in it, that was my dream car.

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That was my goal in life really.

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A few years ago, Carl finally got enough money together to buy that car.

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A lot of people would be watching this and thinking, "Carl's got a Porsche - he's rich."

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Is that the way it works?

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I wish! I work 16-hour days, seven days a week.

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It's not often I get time off to enjoy what I like most.

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A Porsche, there you go. I'd come home and like to take it out

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cos I'd been away from home for three weeks at a time.

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It's nice to get back and enjoy something.

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And that's your big passion.

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At the time, Carl thought nothing could separate him from his beloved motor,

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but then a friend got him interested in the stock market.

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A work colleague put his phone number into a search engine, people looking to buy cheap shares.

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He's given his number to an internet site which is saying,

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if you're interested in shares, you wanted to get started.

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A penny shares website, I believe it was.

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Then got inundated with phone calls from various brokers.

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There are firms that don't approach the FSA and say, "We want to be a stockbroker,"

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such as boiler rooms. They operate on the fringes.

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They steal their money by pretending to be mortgage advisers,

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investment advisers or stockbrokers of different sorts.

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There was one that stuck out that seemed like a sure bet.

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A work colleague checked the company on the internet, looked on the FSA register.

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It seemed they were all registered as well.

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But what Carl's colleague didn't know was that the company

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he was speaking to were almost certainly impersonating

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a legitimate firm who were on the FSA register.

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This is known as cloning and can easily fool people into thinking

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they're dealing with a proper company.

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It's all part of giving a veneer of authenticity

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to what's really a con.

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And this supposed broker who'd called Carl's friend

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said that he had a great offer going

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on some shares in the oil exploration industry.

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I took a tip off the guy. I watched it for a week, two weeks.

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The initial stages, they don't try and make a sale.

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It sounds odd, but it's to show they're not trying to get you to buy something you don't want.

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They want you to want it first. One way is to name a few companies that they're promoting.

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When they speak to you another time, they'll tell you how those companies have done.

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They'll only refer back to the ones that have done well and it makes it sound like they're great stockbrokers

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and they're giving great advice,

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but really they're choosing a few companies

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that have done well in the past few weeks.

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So far Carl and his friend had avoided temptation,

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but true to form, this broker told them

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to watch the progress of some more shares he was tipping.

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Sure enough, when they looked them up on an independent stock exchange website,

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the results were impressive.

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He was telling the truth, it seemed.

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We watched them on the stock market and the price kept going up and up.

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The next time he called, he said, "You missed out on them,

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"but don't worry. I've got these ones you can invest in. These are going

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to do the same thing, but you need to buy these this afternoon."

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Carl's friend took the plunge first and sent some money for the man to buy shares on his behalf.

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And then watched as their value on the market continued to rise.

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It wasn't good to see him make loads of money and profits. I wanted a bit of that.

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He forwarded my number onto the broker that was dealing with it at the time.

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Within a couple of days, I received a call off the guy.

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These early phone calls are all about engaging in conversation,

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building up this false sense of trust

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that the boiler room conmen are so expert at doing.

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The charm offensive worked and Carl quickly felt confident enough

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to invest his own hard-earned cash.

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He transferred £3,000 into what he thought was the bank account of a bona fide stock broking firm.

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I put the 3,000 in. By the same afternoon, it was worth 9,250.

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Carl had recently remortgaged his house so he had money

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available to invest. Over the next few months, he sent more

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and more money to his broker to invest in different shares.

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Until he had spent £12,000 in total.

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He wasn't worried.

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The value of his shares was rising on the stock market

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and to prove he owned them his broker had sent him some certificates.

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It would be difficult to reveal a con by looking at a certificate.

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Share certificates look different for different companies and for different types of people that you deal with.

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Part of the reason the con is so successful is that people invest in shares for medium or long-term.

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They might not start to worry about it until the day comes,

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perhaps many years after that, when they want to get their money out.

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Carl's broker phoned saying he had some more shares that were a sure thing

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and asked if he had any more funds.

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Carl said he had no money left, but let slip he owned a Porsche.

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It was almost as if he had his teeth into me then.

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As soon as he knew I had the capital sitting there, that was it, he wouldn't let go of me.

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The broker talked up the potential profits

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and Carl knew it would take years and years of working

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to get that kind of money.

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Finally he was coaxed into putting his dream car up for sale.

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Having worked so hard to get it,

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Carl eventually sold his pride and joy for £27,000,

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and prepared to put £20,000 of it into his broker's bank account for new shares.

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Carl sent the money. He'd now shelled out £32,000 in total.

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And while all this was going on, Carl's work friend,

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who'd been the first to get involved, had decided to sell his shares.

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He asked the broker to send through the money once this was done and then went on holiday.

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But two weeks later he phoned Carl with some worrying news.

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Our work colleague was back and he still hadn't received any money

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from the shares that were supposedly sold on his behalf.

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That was it then, alarm bells started ringing.

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And whereas previously he used to be on the phone pretty much every day,

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Carl's broker was now, strangely, hard to get hold of.

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It was just like they were folding the shop up, one bit at a time.

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Struck off the FSA register that we found, the internet page disappeared,

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and then last of all, the phone number didn't ring through any more either.

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All you need to operate a boiler room, infrastructure wise, is a telephone that works

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so they can easily shut down.

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Carl had been given a London address for his broker.

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It was only when he travelled down from Northamptonshire to check it out that he learnt the bitter truth.

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There was no sign of anybody. It was as though they had never even been there.

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All we could do was come home, upset.

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Work on, and try to get on with life the best you can really.

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-You've realised, obviously, by now, that you've been scammed.

-Yep.

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What effect has that £30,000 had on you?

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Well, a big struggle, to be honest.

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It's a massive loss. I'm never going to regain it, ever.

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It's as good as my life savings,

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let alone 10,000, my girlfriend's inheritance she received,

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she put towards the Porsche as well.

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I feel indebted to her a little bit now as well.

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It's had a strain on our relationship.

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It's just ridiculous what these people can get away with.

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-You've got to work towards something.

-Yes.

-Whether it's a family, or whether it's a car

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-or a house or whatever it is, we give ourselves goals to work towards.

-Yes, keeps us going.

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-You know? It's very difficult to say no when it's there on a plate.

-Yes.

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It's very easy for people to judge, but, if they're in the same situation,

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they'd have to be sure they wouldn't do the same thing.

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Carl's certainly not alone in getting conned by a boiler room scam

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but he is one of very few with the courage to come forward about it.

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We really need people's help. We can, even off one phone call, manage to catch people who run boiler rooms.

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We manage to freeze assets and get money back to victims on occasions.

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I feel sorry for you because I know how much hard work

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30 grand represents, doing what you're doing.

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I'm glad I was young enough to take it on the chin,

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rather than some old people that get taken in for the con,

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they take their life savings.

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At least I've got many years in front of me to try and recoup that.

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The discussions you've had with your girlfriend, how did they go?

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It was more or less as if she said, "I told you so," but she was understanding.

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We didn't fall out too much over it, to be honest.

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She was there for me when I needed her the most, and that's all that matters in life really.

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-Money comes and goes, unfortunately.

-A tough lesson.

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-Thanks for sharing it. Cheers, Carl.

-OK.

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So, when the scam artists can be this cunning, how can you protect yourself

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against becoming a victim of a boiler room fraud?

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If it's a call out of the blue, a cold call,

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then there's a chance it's not an authorised firm

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because a proper authorised firm shouldn't be cold calling customers,

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so be very wary.

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The next thing to do, if you're tempted to deal, is to do some basic research.

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Any firm offering financial services should be known to the FSA

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but of course there are scammers who impersonate FSA-registered firms.

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If someone claims to be calling from an authorised firm, they might be lying.

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They're conmen after all,

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so you've got to check you're dealing with the proper authorised firm.

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The best way to do that, do a bit of research.

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Call that firm back yourself on their switchboard number.

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If you go online, it's easy enough these days to find firms

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willing to sell you tickets for big events, sports or music.

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What's more difficult, though, is guaranteeing those firms

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will still be there when it's time to collect your tickets.

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I think I'm early.

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The selling of fake or counterfeit tickets is one of the oldest scams on the block.

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Whether it's a music festival, a football match or even a world class event like the Olympics,

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anything that needs a ticket provides an excellent opportunity for scam artists to steal your cash.

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And it's not just customers who lose.

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Festival promoter and chairman of Wembley stadium, Melvin Benn, has seen the damage that conmen cause.

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It's a significant problem. It takes millions of pounds out of the industry every single year.

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Big ticket events that sell out quickly are what scammers really like.

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The way that they look at trying to do that, really,

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is by pretending that they have tickets to desperate fans.

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When fans are desperate, they're desperate. I mean, they'll do anything to get a ticket.

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If you're desperate, crikey, it's really easy to be manipulated.

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May 2011, and a massive trial is under way at Southwark Crown court.

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The main men of a company called Xclusive Leisure and Hospitality Limited

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stand accused of selling thousands of fake tickets to music festivals and the Beijing Olympics in 2008.

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It's taken three years to bring them to justice, after a massive investigation

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by Simon Daniel's team from the Serious Fraud Office.

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They basically sold £5 million worth of tickets and not supplied one.

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The scam that Xclusive undertook was by far the most sophisticated I have ever come across.

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Clive's just one of the many people who ended up suffering

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at the hands of Xclusive,

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when he bought tickets through them for himself and his three children

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to go and see the Beijing Olympics.

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It probably seems the trip of a lifetime.

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We were going to do the trans-Siberian express, Outer Mongolia and China, five weeks away.

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Clive had originally planned to take the rail journey for his honeymoon back in 1995.

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However, I got headhunted just before I got married

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and it was my wife's decision that we couldn't go away for five weeks.

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I had to stay here and help set up the company.

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It was therefore something we were aiming to do in the future.

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However, my wife died in 2002 so we were unable to do it together.

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Two years after his wife's death, Clive decided to take his honeymoon holiday with his children instead.

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The highlight of the trip would be tickets to the 2008 Beijing Olympics

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but he found it difficult to get them through the official outlets.

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I could only go to the secondary market, so you go online and you have all these websites.

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And the website of Xclusive Leisure and Hospitality Limited,

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that was offering Olympic tickets, caught Clive's eye.

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Well, it had, you know, all the logos. It had everything on there, it was fairly easily accessible.

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It seemed to be professionally done.

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I was able to pay with my credit card online.

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There was also a number he could ring.

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I was able to talk to people as well as go onto the website.

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-They put my mind at rest.

-And the price of the tickets?

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I paid probably just over £2,000 in total,

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quite a bit above the face value. As it was the secondary market,

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I understood the fact they had to make a bit of money

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and they were also based in London, so I thought, if I did have a problem,

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at least there's an address I could go to. I was quietly confident.

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But his confidence turned out to be badly misplaced.

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As soon as I made the payment, the website went down, the phone line went down.

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I went to their office in south-east London, no-one there.

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I couldn't get... There was nothing.

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Clive wasn't alone - thousands had been caught out

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and the authorities were beginning to get a sniff of the affair.

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Xclusive tickets shut down on 4th August, the week before the Olympics.

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Obviously at that point there were a lot of complaints in to Trading Standards,

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relating to the non-supply of tickets.

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For people like Clive and his young family, it wasn't just money they felt cheated out of.

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It was the thought of missing the once-in-a-lifetime chance of being at the Games.

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I got stung by this company, at what I saw was pretty much the last minute.

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It was easy to see how Clive and many others had been drawn in.

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On a small scale, Xclusive had been trading legitimately for over a year,

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selling real tickets to football matches and sporting events such as Wimbledon.

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They'd built a decent reputation on internet forums and message boards.

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But Xclusive were playing the long game for big money.

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They had a long-term plan.

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They set up as a legitimate business with the absolute intention of, once the Olympics came along,

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knowing that the demand for the Olympic tickets would be so great,

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flip that into a crooked business that they would just cash in.

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And by God, they cashed in.

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One of the main men behind Xclusive - Terry Shepherd - had previous in this sort of thing.

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He'd been at three companies that had flogged a load of tickets for major events

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and then folded just before they were about to start.

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Banned from running a company again, here he was working at Xclusive

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as, ahem, a consultant, alongside the named director Allan Scott.

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This time the pair had blamed their company's collapse on the fact

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another firm called Peter's Ticketing, run by a Ricky Smith, had run off with all the money.

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So it was key to our investigation to show that was a fabrication and that Peter's Ticketing

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and Ricky Smith were a figment of Shepherd and Scott's imagination.

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To do that, Simon's team at the Serious Fraud Office

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needed to search the homes of Shepherd and Scott,

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as well as the offices of a new company the pair had set up

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called the Online Ticket Exchange.

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But first, they needed a judge to grant them search warrants.

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And everything had to be kept hush-hush.

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We didn't want to tip off the individuals

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that we were investigating because materials could go missing,

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so it's important for that period to keep our name out of the press,

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out of their attention.

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With the judge needing strong reasons

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to grant a search warrant, Simon called on the help of a department

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at the Insolvency Service -

0:20:560:20:57

the Companies Investigation Branch, or CIB.

0:20:570:21:01

They were due to visit Shepherd and Scott at their new offices

0:21:010:21:04

to discuss Xclusive's liquidation.

0:21:040:21:06

Simon asked them to do some investigation on the SFO's behalf

0:21:060:21:09

in the hope that the crooks would be caught off guard.

0:21:090:21:13

They'd dealt with CIB in previous companies

0:21:130:21:15

and they'd never been prosecuted,

0:21:150:21:17

other than being disqualified as directors,

0:21:170:21:20

so I don't think they were too concerned

0:21:200:21:22

about those investigations.

0:21:220:21:24

On their visit to Scott and Shepherd's offices,

0:21:240:21:27

the CIB noticed that they had brought some of Xclusive's computers

0:21:270:21:30

and documents along with them.

0:21:300:21:32

They also took a screen capture of the pair's new website

0:21:320:21:35

which proved they were illegally selling tickets.

0:21:350:21:38

The judge granted the search warrant

0:21:380:21:40

and the Serious Fraud Office led a series of coordinated raids,

0:21:400:21:43

uncovering a treasure trove of evidence

0:21:430:21:45

that blew the murky dealings at Xclusive wide open.

0:21:450:21:48

Scott, who's meant to be the director of the company,

0:21:480:21:51

lived in rented accommodation in Essex,

0:21:510:21:55

and Shepherd lived in a multi-million-pound house in Blackheath,

0:21:550:21:59

filled with jewels and evidence of substantial holidays

0:21:590:22:04

and overseas properties.

0:22:040:22:06

When we saw that, it just brought home our suspicion

0:22:060:22:09

that this was run by Shepherd, not Scott,

0:22:090:22:11

and that Scott was a front man.

0:22:110:22:13

They also seized invoices

0:22:150:22:16

that apparently came from Peters Ticketing

0:22:160:22:18

the firm Xclusive claimed had run off with all the money.

0:22:180:22:21

And the information on these invoices meant Simon's team

0:22:210:22:24

could start to dispel the illusion of Peters Ticketing

0:22:240:22:27

being an actual company.

0:22:270:22:30

First off, they checked the address.

0:22:300:22:33

That turned out to be a post office box facility

0:22:330:22:36

and Peters Ticketing was effectively just a box

0:22:360:22:40

a foot long and ten inches wide.

0:22:400:22:44

A guy called Peter had been paid £100 in a pub.

0:22:440:22:47

He used his bank account,

0:22:470:22:49

there was no monies going through the bank account,

0:22:490:22:51

so a major company with no bank account.

0:22:510:22:53

And the final nail in the coffin for Peters Ticketing

0:22:530:22:56

were the invoices themselves.

0:22:560:22:58

This is one on the right, supposedly sent to Xclusive.

0:22:580:23:01

It's very basic, not a lot of information on the invoice.

0:23:010:23:05

The one on the left was sent to a completely different company -

0:23:050:23:08

same date, different invoice number,

0:23:080:23:10

different style, individual numbers of tickets, there's a grid system.

0:23:100:23:14

If Peter's ticketing had been a real company

0:23:150:23:18

then these two invoices sent on the same day would have had an identical style with similar numbers,

0:23:180:23:24

rather than being completely different.

0:23:240:23:26

The SFO now had their case.

0:23:260:23:29

The next thing was actually to charge the individuals,

0:23:290:23:33

so we charged them in October 2009,

0:23:330:23:35

so barely 12 months after we took on the investigation.

0:23:350:23:39

The main men behind Xclusive Leisure & Hospitality Limited

0:23:390:23:43

were finally brought to the dock in May 2011.

0:23:430:23:47

Company accountant Allan Schaverien was jailed for...

0:23:480:23:51

Company Director Allan Scott was jailed for...

0:23:540:23:57

And company - ahem - consultant Terence Shepherd

0:23:590:24:02

was sentenced to eight years in the big house.

0:24:020:24:04

The trial judge's closing comments

0:24:040:24:06

displayed his very dim view of the trio's actions.

0:24:060:24:10

"It's a massively cynical and utterly dishonest confidence trick

0:24:100:24:13

"which is motivated by greed.

0:24:130:24:15

"Shepherd, you've clearly received the lion's share of the money.

0:24:150:24:18

"When you needed it, you took it.

0:24:180:24:19

"It was blown on a catalogue of excess,

0:24:190:24:21

"including the extraordinary expenditure of your wife."

0:24:210:24:24

And no tears were shed by people like Clive,

0:24:240:24:26

who had been cheated into paying for fake tickets

0:24:260:24:29

by Shepherd's fraudulent company.

0:24:290:24:33

It just wasn't right.

0:24:330:24:35

I'm quite pleased that these people are going to jail, actually,

0:24:350:24:38

because they shouldn't be allowed to do things like this.

0:24:380:24:41

In the end, Clive was one of the lucky ones.

0:24:410:24:44

He was able to claim back the £2,000 pounds he'd lost

0:24:440:24:46

thanks to his credit card insurance.

0:24:460:24:49

And when he and his three children went on their trip to China,

0:24:490:24:52

they managed to get into the Games after all.

0:24:520:24:55

For more information and advice

0:24:550:24:56

on protecting yourself against the scammers, go to...

0:24:560:24:59

Now, before we go today,

0:25:080:25:09

I want to find out about two of the latest scams

0:25:090:25:13

that are doing the rounds right now.

0:25:130:25:15

An expert from the National Fraud Authority

0:25:150:25:17

is going to fill me in on the details

0:25:170:25:19

and today's subject is holiday scams.

0:25:190:25:22

OK, let's start with time-share. I thought that was from

0:25:310:25:34

the '80s and '90s, people taking the mickey with time-shares.

0:25:340:25:37

I think traditional time-share has cleaned up its act

0:25:370:25:41

and there has been legislation,

0:25:410:25:42

but the crooks who used to sell time-share

0:25:420:25:44

have been very inventive in producing new types of products.

0:25:440:25:47

Something called fractionals, where they say,

0:25:470:25:49

"It's a not a time-share,

0:25:490:25:51

"but you actually own part of the property

0:25:510:25:53

"and then you have a number of weeks."

0:25:530:25:55

This is where you're actually buying a portion,

0:25:550:25:57

a tiny portion of a bigger property, is that the way it works?

0:25:570:26:01

Yeah. It sounds like it's an investment

0:26:010:26:03

as well as a place to have your holiday.

0:26:030:26:05

Problem is, you sign the small print and you actually don't own that.

0:26:050:26:08

Remember...

0:26:080:26:10

Don't be hassled into signing

0:26:100:26:12

anything to do with foreign property.

0:26:120:26:14

Now - another holiday scam...

0:26:140:26:16

Changing money - how on Earth can you be scammed that way?

0:26:160:26:18

Someone will pop up and say, "D'you need your money changed?"

0:26:180:26:22

Sometimes, they can look official, so they can be police officers

0:26:220:26:25

or someone who pretends to be a police officer, so you get over that trust,

0:26:250:26:28

you feel you need to change the money, but how do you know what the currency looks like,

0:26:280:26:32

how do you know what the exchange rate is?

0:26:320:26:34

It's very easy to get scammed in those circumstances.

0:26:340:26:36

'To change money abroad, use an official bureau de change.

0:26:360:26:40

'Failing that, keep a ready reckoner of the exchange rate

0:26:400:26:43

'to avoid getting ripped off on the street.'

0:26:430:26:46

Scammers will keep coming up with new and devious ways

0:26:460:26:49

to get hold of our cash but, armed with a little bit of knowledge,

0:26:490:26:53

you can be one step ahead.

0:26:530:26:55

Stay safe - I'll see you next time.

0:26:550:26:57

Subtitles by Red Bee Media Ltd

0:26:590:27:02

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.


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