Land Banking Scam You've Been Scammed


Matt Allwright uncovers the secrets of sophisticated scams. Matt visits Bill, who was persuaded to invest thousands in land only to learn that he had been conned.


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Transcript


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Out there are tricksters and conmen

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trying to get their hands on your savings

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and every year, a shocking 3.2 million people

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fall prey to their ingenious and devious scams.

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Coming up, how investing in land can land you in financial ruin.

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It was fairly devastating for me.

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It has cost me financial loss and trust in people.

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And the phone scam that's crippled small businesses.

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My house is at risk. My business is at risk.

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Everything I've got is at risk.

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I'm here to tell 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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You know, all this used to be fields, long before I was born,

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and this land then would have been virtually worthless

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unless you were a sheep or something.

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But then somebody put in a planning application

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and the value of the land rose dramatically.

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That's why land banking is such a good idea. You buy a bit of land,

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get a planning application in and then sell it off to

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a property developer for much, much more.

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But as with anywhere, where there are large sums of money involved,

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there is also a little smell of a scam.

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Land has traditionally been one of the safest investments

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with potentially huge profits to be made over a relatively short period,

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but it isn't without its risks.

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All these facts make it very attractive to fraudsters

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and the City of London Police have long been aware of conmen

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selling land to investors that is never going to make them money.

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People make investment with the intention of it being

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a responsible investment

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and it can be very, very embarrassing,

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and that personal pride of working all your life

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to get what you have and then

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losing it all in one swift movement of a fraudster is heartbreaking.

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I'm off to West London to meet a chap who has recently discovered

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the perils of investing in land.

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Retired company secretary Bill Dean is no stranger to investment.

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With a lifetime of experience investing in stocks and shares,

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he was confident making financial decisions

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and analysing the risks involved.

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When his father passed away, he had a lump sum to invest,

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so when a relative innocently passed on details he had received

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about a land investment opportunity, Bill wanted to find out more.

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I was just interested really in making a safe investment that

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would give me a good return and this land agent contacted me

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and said they were selling land down in Cullompton in Devon.

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He said it would be a really good investment because Exeter Airport

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is quite close to Cullompton

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and developing fairly fast as an international airport.

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So, you are offered a seemingly perfect plot

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with fantastic prospects.

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All you have to do is sit tight

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and wait for the agents to gain the all-important planning permission.

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-Have you got a name for this guy?

-Well, his name was Edward.

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So tell me about Edward. What was he like to speak to?

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He was very charming.

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He had a very educated accent

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and he was very convincing that the land investment was

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a really good opportunity to make a reasonable sum of money.

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One of Edward's gifts was his ability to form

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strong and lasting relationships with his victims.

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Slowly and surely, he built up trust with Bill.

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Did you ever make any calls to the council?

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Initially, I wanted to find out if the land existed, which I did,

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and I was satisfied that the land existed.

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And that's as far as I went.

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Having established a bond with Edward, Bill was convinced

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this would be a great investment and decided to seal the deal.

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-Let's talk about sums of money.

-Right, OK.

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How much initially did you hand over?

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Initially, I invested £8,000.

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£8,000 was a sizable chunk of Bill's savings,

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but when he received the deeds to the land, everything seemed fine.

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It's not uncommon for you to make that initial purchase

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and to come in and say, quite naturally,

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"There's a better opportunity here or a further opportunity here."

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As I developed the relationship with Edward, I felt pretty convinced

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that my investment was safe and more money was invested.

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In the end, I invested £20,000.

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So confident was Bill in Edward and the investment in Cullompton,

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he decided to talk to his friends about it.

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-What was it that attracted them? Did you have to sell it to them?

-No.

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No, I wouldn't sell it to them, no.

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I just gave them all the information and they made their own decisions.

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Talk to me about the kind of conversations that you were

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having with each other.

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Well, I was the main contact with Edward so I would ring him up

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every few weeks and then I would report back to the other two.

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-So they are trusting you pretty much completely?

-Yes. Yes.

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You have taken on a huge responsibility there?

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Yes, I have, that's right.

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Bill and his friends had invested

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a whopping £42,000 in the Cullompton land.

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Excited by the apparent financial opportunities,

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they were unaware that the scam was about to unfold even further.

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Company number two was an investment in Scotland, in Dumbarton.

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Feeling confident with the idea of land banking,

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and with the moral support of Edward,

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Bill invested £10,000 in the Dumbarton site.

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But they were very clever.

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What they did was, they said there was a little bit of land still

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left over which the directors owned, but they are prepared

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to let you have some of their land at a reduced price.

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How much have you got invested at the end of that process?

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My total then became £30,000.

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Adding this to the money invested in the Cullompton site,

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Bill had now parted with £50,000.

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And, as before, Bill passed the details on to his two friends.

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One cautiously invested a further £2,000,

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but the other invested a further £34,000,

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bringing the total amount invested by all three to over £100,000.

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Thinking the planning permission was about to be submitted,

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they waited patiently for the good news.

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They said that the council had decided to delay

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our planning application

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because this land had been sold on the opposite side of the road

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and there was work to be carried out in building houses

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on that particular piece of land.

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In August 2010, Bill went on holiday and felt confident that

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when he got back, his investment in land would begin to pay off.

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When I got back from holiday

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and tried to telephone the company,

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the line was dead.

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I was just trying to find out what was going on.

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I went on to Companies House

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and realised they had gone into liquidation.

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The agents from the Scottish Dumbarton site

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had disappeared without a trace,

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leaving Bill feeling anxious about his investment.

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So he turned to the one person he really trusted.

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When I spoke to Edward about investment in Scotland,

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he was quite helpful,

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and he gave the assurance that our money was safe with him.

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Until the police got involved

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and then started investigating both companies.

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Bill discovered that both companies were linked.

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His relationship with Edward,

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the person he'd trusted completely over four years,

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had been based purely on lies,

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costing him and his friends £100,000.

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The friend that invested the smaller amount, he is OK.

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The other one has taken it very badly

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and we are no longer in contact with each other.

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She is completely devastated by it all.

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I feel in some ways I've let them down

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because I should have made further investigations.

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What's the real cost of this to you?

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It has cost me a friendship.

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It has cost me financial loss

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and trust in people.

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Land banking scams over the last ten years have been massive.

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You know, and those are people like yourself, you have had a history

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of investing which has given you confidence and made you think,

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"It's worked for me in this area, this is just another sphere."

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Yes, that's right. That's right.

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The City of London Police are continuing to investigate

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and Bill's hopeful both companies will wind up in court.

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We are making significant progress to crack down on this type of crime

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and to bring offenders to justice.

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If you or anyone you know is considering investing in land,

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it is worth checking out some key points.

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A lot of it is based around making checks on the internet,

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Land Registry checks, for example, Companies House checks,

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to see the legitimacy of the company.

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They're around address checks to see what is the address that this company

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are trading from.

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It may sound basic, but do your research thoroughly.

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Visit the land itself, if it is all possible,

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or get somebody trusted to visit the land

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and find out what it looks like.

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Thirdly, and most importantly, talk to the council about the land

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you're thinking of buying.

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If they tell you it's green belt,

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and that planning permission is never going to be granted,

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you know it's a scam.

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If you've been a victim of this type of fraud,

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there is help out there.

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There are support networks out there that can help.

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If you don't know where they are,

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we, the police, can help put you in contact.

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Sadly for Bill, he has learnt his lesson in the hardest possible way.

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It is very easy to get tricked into parting with your money

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and these people are very good at it.

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You know, sometimes it can be a struggle

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to keep on top of the latest changes in technology.

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If you get a contact out of the blue from a firm,

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claiming to be working with one of the big utility providers,

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then you take notice, don't you?

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Especially if the utility in question

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is your trusted landline telephone.

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Mobiles may have gone all smart and sophisticated,

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but we Brits still spend an average of three hours a month

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using our landlines.

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It's not just about having a good natter.

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People who run their own business rely on the landline

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to stay in touch with their customers.

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But, in 2008, a pair of scam artists

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decided to exploit this to their own advantage.

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They targeted small businesses

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in a scam involving selling phone rental contracts,

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conning innocent people out of thousands of pounds.

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Julie Goodwin lives in Essex, and for the last 16 years

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she has run a successful health store business.

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Her phone system is crucial for everything,

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from speaking to customers to placing orders,

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so when a salesman came into one of her shops in 2008,

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and said he was with British Telecom,

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she listened to what he had to say.

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He seemed very approachable. He said he was in the area.

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He was working with BT

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and he was the business arm of BT. He was BC Telecom.

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In 2008, a company called BC Telecom Limited paid Julie a visit.

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This company shouldn't be confused with the legitimate company

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trading today with the same name.

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Back then, Julie had never heard of BC Telecom Limited,

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but the connection with BT

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was enough to convince her they were a reputable firm.

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The salesman said he'd called by

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to tell her about a major change in technology.

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All phones had to be changed from analogue to digital in the next,

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I think, it was 18 months.

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The salesman told Julie that after the digital switch over,

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her analogue phones would stop working.

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Julie was told the only way she would be able to continue

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using a landline for her business was to upgrade

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to a brand, spanking, digital phone system.

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The new phones would be expensive to buy and install

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so the salesman told Julie she would just need to sign a lease agreement,

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which would spread the cost.

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He said BC Telecom Limited worked with several leasing companies

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and could organise all of this for her.

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It sounded like a fantastic deal.

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I was getting an upgrade, for...which I thought was a reasonable amount,

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and that was going to take me into the future.

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Julie was almost won over.

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Then the salesman delivered his killer line, the clincher.

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He said a Government scheme refunded small businesses

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for the cost of switching to digital phones.

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That meant that although Julie had to pay for the phone system now,

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the Government would pay her back later. This, of course, was a lie.

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And was part of a well-planned sales patter to draw her into the scam.

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He did say he was only in the area for a couple of weeks

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and he was moving on to other areas, so it was almost like there

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was a slight pressure there to get it changed while I could.

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Julie was sold, and filled in the forms there and then.

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And then when I said, "Are you going to leave a copy?"

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He said, "No, we need to get it signed by the lease companies.

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"We'll drop it in to you in a couple of days."

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Because he was so helpful, I thought, yeah, that's fine.

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The salesman assured Julie that everything would be taken care of

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and a few days later, she had a new swanky phone system installed.

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GP John Cormack has a similar story.

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He runs a busy family surgery

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and his phone system is a vital point of contact for his patients.

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In 2008, he was visited by not one, but two salesmen

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from BC Telecom Limited and, as with Julie,

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they said they were part of BT.

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The salesman told John about the Government scheme that would

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refund him the cost of leasing the new digital phone equipment,

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and it seem like an offer too good to refuse.

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And he, he was very glib. He chatted away.

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I mean, he could have sold the Eiffel Tower, I think,

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because he was one of those people who had a quick answer.

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The salesman's fast-talking style worked its magic.

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John agreed to the deal and filled in the forms, but,

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as with Julie, John wasn't left with copies

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of the agreements he'd signed.

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I said, "Why don't I just photocopy it for you

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"because we can keep a copy and that will save you a job."

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And they said, "No. No, need to do that.

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"We will get it and send it back to you in a nice sort of pack."

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That sounded so exciting that I couldn't turn down the offer.

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He may not have had his paperwork, but within days John's surgery

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had a new phone system, and after a year both John and Julie received

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the so-called Government refunds

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they'd been promised by BC Telecom Limited.

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From memory, I think the amount was about £3,600.

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John and Julie had been told that every penny they spent leasing

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the phone systems would be refunded by the Government,

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so they continued making payments to the leasing firms,

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but there was no sign of any more Government refunds

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and they soon started asking questions.

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The number was unobtainable. Something was seriously wrong.

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There was nothing wrong with the phone.

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The reason they couldn't get through

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was that BC Telecom Limited had gone into liquidation.

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When BC Telecom went bust,

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we stopped getting payments back, so suddenly we were out of pocket.

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With no more refunds from the Government and BC Telecom Limited

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in liquidation, both John and Julie decided to cancel their leases,

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and that's when they began to realise they'd been scammed.

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They said, "You've signed for 87 months. You've got to pay."

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That's when you realise you've been scammed.

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Julie was locked into seven-year contracts

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with three different leasing companies.

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John also had a seven-year contract and, again,

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owed the best part of £45,000.

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My house is at risk. My business is at risk.

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Everything I've got is at risk.

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So how had BC Telecom Limited made their money from this scam?

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Gillian Turner and the investigation team

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from Hertfordshire Trading Standards were determined to find out.

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Early on, we did try and contact BC Telecom Limited to see

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if they had a legitimate explanation or whether it was

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a misunderstanding and they didn't want to speak to us at all.

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We took that as a bit of a red warning.

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John and Julie were among scores of people who

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complained about BC Telecom Limited

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and the team at Hertfordshire Trading Standards

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began trying to build up a picture of what had happened.

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We were starting to find a pattern was emerging that

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a number of lies were being told over and over again to these businesses.

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One of the big whoppers was that there was no Government refund.

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The refunds John and Julie received at the end of their first year

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were paid by BC Telecom Limited to make the scam seem real.

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It was only when the rebates began to run out after that first year

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that they realised something was the matter and when they tried

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to contact the company, the company was no longer available.

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BC Telecom Limited had convinced their victims

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to switch their analogue phone systems to digital ones,

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signing lengthy financial agreements

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with third party suppliers, but how were they making their cash?

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It was all to do with commission.

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Each time BC Telecom Limited

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signed someone up to a contract with a leasing company, they took a cut.

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The beauty, in a way, of this scam was that BC Telecom

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got their cut quite early on in the scam, of money that is.

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The businesses did not contract directly with

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BC Telecom, they contracted with the finance company,

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a third party finance company, so they could remove

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themselves from the situation and leave it all behind, if you like.

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So who were the men behind this devious scheme?

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BC Telecom Limited was run by Daniel Buttle and Daniel Cullen,

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both in their late 20s.

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Hertfordshire Trading Standards were now determined to make

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a watertight case against them to try and put an end to the company

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once and for all.

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They wanted to get to the bottom of the supposed links

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with British Telecom, and it wasn't long

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before John stepped forward with indisputable evidence -

0:20:360:20:39

a recording of his meeting with BC Telecom Limited.

0:20:390:20:43

I recorded the conversation because, as I understand it, in law,

0:20:430:20:50

a verbal agreement is as binding as a written agreement,

0:20:500:20:53

so I had a record of the verbal agreement.

0:20:530:20:56

The following is the actual recording,

0:20:560:20:59

and Daniel Cullen can be heard explaining

0:20:590:21:01

that BC Telecom Limited is linked to BT.

0:21:010:21:04

And just in case that wasn't clear enough...

0:21:090:21:11

Trading Standards investigators

0:21:160:21:19

then called British Telecom directly.

0:21:190:21:21

And as suspected, they confirmed

0:21:210:21:23

there were no links with BC Telecom Limited.

0:21:230:21:25

For Bruce Carter, customer experience director at BT,

0:21:270:21:30

the news didn't come as a surprise.

0:21:300:21:32

You do get companies who try and trade with names similar to BT,

0:21:340:21:37

so they are trying to fool customers by having similar names.

0:21:370:21:41

The investigators now had clear proof that BC Telecom Limited

0:21:410:21:46

had deliberately misled customers, but worse was to come.

0:21:460:21:50

Sometimes the paperwork had actually been signed for them

0:21:500:21:54

outside their knowledge, after they had signed.

0:21:540:21:58

When John and Julie signed their agreements,

0:22:000:22:02

the two Daniels whisked away

0:22:020:22:04

the paperwork without leaving copies behind. Now it was clear why.

0:22:040:22:08

They'd later changed the lease agreements

0:22:080:22:10

to make them more valuable.

0:22:100:22:12

Julie thought she had only signed up to a one-year contract.

0:22:120:22:16

When she saw her paperwork,

0:22:160:22:17

she realised she was liable to pay for seven.

0:22:170:22:20

It was a similar story for John,

0:22:200:22:23

but in his case, the two Daniels

0:22:230:22:25

had actually gone as far as forging his signature.

0:22:250:22:30

An agreement with a signature on, which purports to be my signature,

0:22:300:22:33

which is nothing like any signature I have ever done in my whole life.

0:22:330:22:38

With evidence like this, Trading Standards were ready to take

0:22:380:22:42

action against Daniel Buttle and Daniel Cullen.

0:22:420:22:46

We looked at the Companies Act, which concerns fraudulent trading,

0:22:460:22:50

and that seemed to be the most appropriate charge or

0:22:500:22:53

information to lay at the time.

0:22:530:22:55

Buttle and Cullen were summoned to court,

0:22:560:22:59

where Gillian and her team presented their evidence.

0:22:590:23:02

Their hard work paid off. Both Daniels were found guilty of fraud.

0:23:020:23:06

Daniel Buttle was sentenced to 18 months behind bars.

0:23:060:23:10

Daniel Cullen received three years.

0:23:130:23:16

Although that included time for another fraud

0:23:160:23:18

he carried out in another part of England.

0:23:180:23:21

At last, the dodgy duo have been stopped,

0:23:230:23:25

but for their targets, the nightmare is far from over.

0:23:250:23:28

Although Buttle and Cullen have been banged up,

0:23:280:23:31

John and Julie are still tied into their leasing contracts

0:23:310:23:34

for seven years,

0:23:340:23:36

despite the fact they never signed up to them.

0:23:360:23:39

They are also not getting any money back, as they were promised.

0:23:390:23:43

These are finance companies who were not directly involved in the scam,

0:23:430:23:47

so in some senses have rights to recover their monies

0:23:470:23:53

and some finance companies have had that view.

0:23:530:23:56

For Julie, this is all a bit too much to take.

0:23:580:24:02

I mean, how can you still be liable for something that two people

0:24:020:24:06

have gone to prison for?

0:24:060:24:07

And, you know, the leasing companies are still saying,

0:24:070:24:10

"It is you who needs to pay."

0:24:100:24:12

The leasing companies had paid out a huge amount of money

0:24:120:24:17

to BC Telecom Limited

0:24:170:24:18

for obtaining these contracts.

0:24:180:24:21

They had no legal reason to end them.

0:24:210:24:24

I think the important thing now is to campaign to have the law tightened.

0:24:250:24:31

If it wasn't for Trading Standards, we would have had no redress,

0:24:340:24:38

no satisfaction whatsoever.

0:24:380:24:40

If you are concerned about getting caught up in a similar scam,

0:24:400:24:43

there are things you can do to help protect yourself.

0:24:430:24:46

Never contract with a company unless you are really clear who they are.

0:24:460:24:51

Never send cheques, for instance, to companies

0:24:510:24:54

unless you understand who they are and if you need to speak to us

0:24:540:24:59

about it, we will very happily check them out.

0:24:590:25:02

For more information

0:25:020:25:04

about protecting yourself from the advances of a scammer, go to:

0:25:040:25:11

Before we go, there's just time to tell you

0:25:150:25:17

about some of the latest scams out there.

0:25:170:25:20

I have come to meet an expert from the National Fraud Authority,

0:25:200:25:23

to get the lowdown on what you should be looking out for.

0:25:230:25:27

Today, we are looking at scams that happen on your doorstep.

0:25:290:25:32

Cold-calling, doorstep, rogue trading scams are still prevalent.

0:25:320:25:37

Organised gangs go around the country

0:25:370:25:39

trying to take advantage of the elderly,

0:25:390:25:41

the isolated and the vulnerable.

0:25:410:25:44

Let's talk through a typical example of what might happen,

0:25:440:25:47

let's say with a roof.

0:25:470:25:48

Roofing is a good example.

0:25:480:25:51

They will knock on your door and they will say, they are in the area

0:25:510:25:55

and they have noticed two or three of your tiles need to be replaced.

0:25:550:25:59

You will say, "OK. How much?" They say, 50 quid."

0:25:590:26:02

Up they go and come down ten minutes later with a dozen tiles,

0:26:020:26:05

all broken, £50 each, 600 quid they want from you.

0:26:050:26:07

The golden rule here is never, ever have any building work

0:26:070:26:12

done on your home without first getting a quote

0:26:120:26:15

and taking up references.

0:26:150:26:16

Next, another doorstep scam - this time it's about insulation.

0:26:160:26:20

They'll knock on the door and say they are in the area,

0:26:200:26:23

acting on behalf of one of the energy companies or the Government,

0:26:230:26:27

so giving a false impression of who they're working for.

0:26:270:26:29

They say they have to get insulation in

0:26:290:26:31

and it will be £300 or £400, but you can claim that back.

0:26:310:26:34

They probably put nothing in.

0:26:340:26:36

They might take old stuff out and put something cheap in

0:26:360:26:39

and then you can't get the claim back.

0:26:390:26:42

Government schemes can offer great discounts

0:26:420:26:45

from the cost of insulation

0:26:450:26:46

and they should also be able to recommend a trusted installer

0:26:460:26:50

to come and fit it for you.

0:26:500:26:51

So, there you go.

0:26:510:26:53

It doesn't matter how clever the scam is, if you recognise

0:26:530:26:56

the warning signs, you can stay one step ahead of the conmen.

0:26:560:27:00

Matt visits Bill, who was persuaded to invest tens of thousands of pounds in land only to find out that he had handed over his savings to conmen, a decision that has cost him not only money but also a close friendship.

Plus, the men who were jailed for their part in a telecoms scam that has crippled small businesses, and the scam artists who come knocking on your door.


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