Carbon Credits Scam You've Been Scammed

Millions of us are targeted in scams every year,

and whether it comes in the form of an e-mail, a cold call or a knock

at the door, they are all designed to do one thing and one thing only.

To get you to part with your cash.

Coming up,

when investing in clean air turns out to be just a load of hot air.

How quick you can lose a lot of money!

Plus, how a mobility aid company and their travelling salesmen

were in the business of helping themselves,

not their elderly customers.

She was very distressed about it.

She thought she were having a heart attack.

Well, I'm here to tell you what the con man doesn't want you to

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

When you're making an investment, obviously you want

the highest return you can possibly get, but it's also good

if you can feel that you're doing something beneficial as well.

That's why green investments are very fashionable now.

Yes, when it comes to investments,

it seems that green is the new black,

and one scheme that is firmly on the radar

of the Financial Services Authority

is something called...

Carbon credit trading involves, believe it or not,

actually buying a certificate that entitles you or shows that

you own a tonne of fresh air,

and the whole idea behind it is that that certificate,

that tonne of fresh air,

might be bought by a polluting industry one day to offset

its polluting emissions, so if it pollutes to the tune

of 1,000 tonnes, it might buy 1,000 carbon credits off various people.

Carbon credits are generated by projects

that reduce greenhouse gases in the air,

such as planting trees or renewable energy like wind power.

These can then be traded or sold on to polluting companies.

The man I'm about to meet

got a call out of the blue about carbon credits.

It hasn't helped the planet's future, or his.

Carbon credits do exist as a legitimate form of investment,

but recently they have also become very popular with con men

as a way of scamming ordinary people out of their savings.

48-year-old Robert Blakely lives in Newcastle.

He used to be an active martial arts expert

and enjoyed playing in bands on the Tyneside music scene.

But, in 2007, Robert received some devastating news

when he was diagnosed with Myotonic Dystrophy,

a debilitating neurological condition

which affects his movement, coordination,

and, at times, his speech.

It takes real guts for Robert to meet me,

but he's determined to share his story.

-Hello.

-Hello.

-Are you Robert?

-Yes, I am.

Nice to meet you. I'm Matt. Thank you.

Robert's illness forced him into early retirement

after 23 years' dedicated service as a postman.

He was given a lump sum payout of £50,000

and knew he had to invest it very wisely,

so when he got a call from an investment firm,

he was keen to hear more.

Tell me about the call that you got.

The call was out of the blue, just a cold call.

It said how good carbon credits are for making money,

because the banks are doing nothing with interest.

The company told Robert that investing in carbon credits

would earn him around 10-15% interest - far more than

he would get by simply putting his money in a savings account.

He was impressed with what he heard.

Very positive, and it's going to happen,

you're not going to lose any money, and you'll make a lot of this money.

It seemed like the call had come at the perfect time for Robert,

but unbeknown to him, it was the beginning of a calculated scam.

You'll take a first call out of the blue,

where they will just build up a bit of rapport with you,

they'll ask you a few questions about your attitude to risk,

and whether you want to save for the future for something.

Sure enough, the person on the phone asked Robert about his situation.

Believing he was speaking to someone who could help him

invest his precious nest egg,

Robert was honest and up front about the lump sum he had.

What did you say to them?

I've got 50,000.

Just unbelievable.

Now they knew Robert had money to spend,

the company began carefully grooming him.

Then you'll get a second call some days later,

where they display a little bit about what they can offer,

so they give you some examples about carbon credit type

investments that have made money for other clients of theirs,

and it might then only be on the third or fourth call you'll get

a bit more of a hard sell.

I've always said no to any cold calls, except that one.

Hard sell, very fast. Just hard sell.

It wasn't just what the person on the phone was saying

that helped convince Robert he was speaking to a bona fide company.

There are all sorts of tricks used by these investment scams to

make it sound more and more convincing.

We've come across examples of them playing tapes of dealing rooms

in the background, with brokers shouting left, right and centre.

In the background, there was a big office sound, like a call centre,

and I thought, "Well, it must be a big company."

Robert was being cleverly drawn in,

despite advice from those around him.

Your sister warned you, when you got your lump sum.

Don't invest in cold calls, especially!

So you've actually had a direct warning from your sister.

Yeah.

And then you have received a cold call,

and this person has managed to put the advice

that your sister's given you completely out of your mind?

Yeah.

The company had Robert well and truly on the hook,

and by the time he'd had four separate calls from them,

he was feeling confident that carbon credits were a safe bet.

So, how soon afterwards, then, did you decide to invest?

Partly straight away.

Not wanting to risk the full £50,000,

Robert agreed to an initial investment of £5,500.

After that decision, after handing over that money, how did you feel?

All right, because I still had £45,000 left.

But the company had got money out of Robert once,

and they knew there was more where that had come from.

Within days of Robert's initial outlay, the company were back

on the phone trying to persuade him to hand over more money

and they were using every trick in the hard sell handbook.

They might say there's a discount on it,

they might say the offer closes at the end of the day.

It puts you under pressure to think,

"I've got to get in now, otherwise I'll never get in at all."

They called you again.

Yes.

Talk me through the detail of that call. What happened?

The sales pitch was,

"You're going to make even more money than the first investment.

"If you buy this now, you'll double your money next day."

Robert knew he'd never be able to work again

and that he had to make the very most of his lump sum,

so the prospect of doubling his money was impossible to resist.

You went for a second investment, which was?

15,000.

Double.

More than double what you'd invested first time round.

Robert had now invested almost half of his £50,000,

but had no reason to suspect anything was wrong.

How are you feeling about this?

Still seemed all right about it.

Because I still had the money in the bank that I needed.

But the company was quickly back in touch,

and this time they were going for broke.

They told Robert about a third scheme,

requiring an investment of £30,000.

How did they sell to you? Because that's a huge sum of money.

It was another special offer.

It had to be in by the end of the month to qualify for it.

I don't know why I did £30,000. That's ridiculous.

Why do you think you did?

I just can't explain it. Just went like that.

I mean, £30,000, ridiculous. £15,000, ridiculous.

Robert had now handed over his full £50,000 nest egg

and had been sent certificates for two of his three investments

but when he rang to chase up the third he got a nasty shock.

What you'll probably find is that the company you bought them off

has disappeared and won't answer your calls.

I went and rang up about the certificates.

And that's when I found they weren't there.

It was just an answer machine saying,

"We can't get to the phone at the minute."

I phoned every day for about two weeks. Nothing.

Robert was starting to realise that his £50,000 was gone and,

desperate to get his money back,

he was now even more of a target to scammers than ever.

We've seen people throw good money after bad by either buying

more of the same thing or by trying to pay fees to someone to

get them a good deal out of what they've bought,

and neither do we really see producing any benefit.

Robert contacted another company who offered carbon credit investments.

They listened to what he had to say and told him that

for a fee of £2,000 they could be able to help get his money back.

You've now entrusted yourself to another company.

It was either, "You've definitely lost £50,000,

"or there's a possibility of getting £50,000 back off this company."

Right.

So I thought I'll take the risk.

OK.

But Robert's heard nothing.

It's likely that both of these companies are shams,

and that his certificates are worthless.

I'm worried, here, Robert, that we're dealing with a boiler room.

-That's what we've got.

-Ah.

I don't know how much you know about boiler rooms and how they operate.

Nothing.

OK. What they will do is sell you shares,

and the shares themselves are worthless.

From your story, your first money's gone.

Robert has been trying to come to terms with this massive loss

and understand how he was so easily conned.

He believes his condition may have had a part to play.

Medicine, I'm sure. I'm sure it's the medicine.

Must be affecting my brain, and I don't realise.

But the fact is con men can be extremely clever

and can persuade anyone to part with their cash.

At the end of this, we see some terrible devastation.

I mean, it really does affect the victim emotionally.

People have lost life savings, pensions.

They've lost dignity as well,

and sometimes family relationships break down as a result of this.

It involves real pain and anguish.

You're in quite a vulnerable position.

That huge sum of money in the bank,

and you're not in the best of health,

and your medication is affecting you.

I mean, that was a very bad time to receive that call, wasn't it?

It was.

Just unbelievable.

How quick you can lose a lot of money.

What difference would the 50,000 have made?

A lot.

Security, it's paying off my house.

What's going to happen with your condition, your illness?

Progressive. It will get worse.

Possibly in three years I'll have a heart attack.

OK.

We'll see how it goes.

The chances of Robert seeing his £50,000 again are slim.

He's watched a future he thought was secure

vanish in just a few phone calls.

If only he'd known the warning signs.

A proper, authorised, FSA-authorised investment firm shouldn't be

calling you at home out of the blue.

If you get a cold call offering investment,

there's a fair chance it's not a legitimate firm.

Promising you 30, 40, 50% returns, not very realistic.

Be wary if you're given claims of huge profits. It's probably a scam.

A con man might lie to you and tell you he's

calling from an FSA-registered firm, so don't just take his word for it.

Do some research to check who you're really dealing with.

The best way to do this is to find the main phone number

of the company they are claiming to be.

See if they've heard of the person that's been calling you.

You can call the FSA's consumer contact centre to get some guidance

about the sort of investment that you're thinking of making.

And if you fear you might have been caught by a fraud,

you can call Action Fraud to get some assistance from the police.

Carbon credits do exist.

Like all good scams, this one's based in truth,

but the scammers know how to take that truth

and twist it to their own advantage.

So beware.

Travelling salesmen who visit your home can be a good thing,

especially for those who find it harder to get out and about.

But in 2007 a firm who sold mobility aids for the elderly

sent its sales team out on the road with one purpose

and one purpose only - to scam people out of their savings.

The company was rotten to the core, basically,

and that came from the directors themselves.

The case focused on a Chesterfield-based company

called Compass Mobility Ltd.

They sold mobility aids to elderly, infirm and vulnerable people.

But their apparent concerns for their customers' wellbeing

were not quite as honourable as they seemed.

I think it became apparent at a very early stage that we were

dealing with a company that were more interested in making money

than they were with dealing with customers, and had very

little regard of how they got the money from those customers.

It was this lack of regard that first brought Compass Mobility Ltd

to the attention of the authorities.

David Lodge was the West Yorkshire trading standards officer

in charge of the case.

When the company was first set up,

it was only a relatively small amount of complaints,

but it soon snowballed, and it soon became very apparent that there

was a pattern developing, and we became concerned about not just the

volume of complaints, but the type of complaints we were receiving.

It was customers like 94-year-old Kathleen Halliwell

who were making those complaints.

Her nephew, Hayden, contacted Trading Standards after his elderly

and partially blind aunt had been sold a mobility aid

by one of the company's travelling salesmen.

Her dealings with Compass Mobility Ltd left her very distressed

and so Hayden has agreed to tell the story on her behalf.

Kathleen's ordeal started, as it so often does in these cases,

with a phone call out of the blue.

She thought it was from social services,

asking her if she required aids to help her around the house.

Kathleen didn't know it,

but this is a common tactic to help con men get their foot in the door.

The initial sales pitch was actually claiming to be from social

services or from some kind of hospital referral,

so in other words, the customer thought that they were being

talked to by some health professional, and that was

one of the ways they'd been able to get into the customer's house.

But once in, the sales pitch started.

The gentleman came the following day and knocked on the door,

and my auntie opened it,

and she assumed he was the gentleman from the social services.

He asked my aunt how she was able to get in and out of the bath,

and my aunt said she struggled.

He said,

"Well, we have a product here that would help you get in with ease."

He didn't have a product to show her, he just talked about it.

And he persuaded my aunt to purchase this product.

As Trading Standards began to look into the complaints coming in,

one thing was for sure - the sales people

knew exactly how to get their victims to sign on the dotted line.

They used fairly hard sales techniques - in other words,

they stay in people's houses for several hours at a time,

refusing to leave until they got them

to agree or sign up to something, so a hard selling technique's

just designed to confuse people and part with money.

In Kathleen's case, there certainly was confusion.

My aunt thought he was from the social services,

and she didn't realise she would have to pay for it.

But she was soon talked around by the company's salesman

into handing over £1,900 for a bathroom aid.

She had this money in an envelope in the drawer, and I think

she gave it to the salesman to count out, because she can't see.

The salesmen counted out Kathleen's £1,900, then left,

and as promised, the bath aid was delivered the following day.

The problem was, no-one showed her how to actually install it,

and with nephew Hayden away on holiday,

Kathleen tried to set it up herself, with alarming consequences.

She pressed the button, and it forced her, and pushed her over.

She thought she were having a heart attack,

and it took her over an hour to get out of the bath.

She was very distressed about it.

When Hayden returned from holiday,

he complained to Compass Mobility Ltd that the product wasn't suitable

for his elderly aunt,

but was told that the seven-day cooling off period had expired

so she couldn't claim a refund.

Changing tack, he called the company who manufactured the bath aid,

and received some shocking news.

I asked him if the product was suitable for somebody who lived on

their own when they were registered as blind, or couldn't see very well,

And he says, no, it wasn't a suitable product.

But that wasn't the only surprise.

They also told me that the

recommended retail price of this product was £300.

So, having pretended to be from social services,

Compass Mobility had charged Kathleen more than six times

the going rate for something it wasn't safe for her to use.

And she wasn't the only one who'd been targeted

by these ruthless con men.

We've got an example of a gentleman being sold a motability

scooter who was registered blind.

Another example where the lady actually bought a motability

scooter and she lived up 12 flights of stairs.

Just anything to get money out of people,

no regard to whether the product was actually going to do what it

was supposed to do - in other words, help them with their disability.

Each case followed the same pattern as Kathleen's.

The salesmen would get in through the door by pretending to be

from social services, and using pressure selling,

they would charge people astronomical sums

for items that weren't suitable.

What they're doing is deliberately targeting vulnerable people.

That's against the law, but from a moral point of view,

I think most members of the public would struggle

to come to terms with that type of activity.

With complaints coming in from far and wide,

Trading Standards began working with specialist unit Scambusters.

The Scambuster team basically took a lead in the investigation

and coordinated from their headquarters in York.

From that, other agencies such as the police,

the Insolvency Service and Companies Investigation got involved.

The team now had to investigate

whether the complaints were down to rogue salesmen

or that the practices were being orchestrated from the top down.

They also tried their hardest to help victims where they could.

Victims like Kathleen.

Trading Standards actually wrote to this company,

and within a week, my aunt's had a cheque for the full amount.

But if Compass Mobility Ltd thought they could pay Kathleen off

and make Trading Standards go away they were sorely mistaken.

The fact remained, Kathleen and scores of others had been deceived,

ruthlessly overcharged and sold products

that were downright dangerous for them.

We reached a point where we thought we needed to tackle these guys,

and we need to talk to them, and effectively what happened,

we executed a warrant of their business premises.

A number of individuals were arrested,

quite a lot of business documentation

and computer equipment was taken away.

Following the search of the business premises,

the officers also searched individual's houses,

gathering even more evidence.

Initially, there were five people under investigation.

We distilled that down to the three main directors.

Two of whom were Timothy Wright and Vincent Watkinson.

The three company directors were interviewed at length

and on multiple occasions, and they had their excuses ready.

They tried, basically, to claim the actions on their salespeople.

Now, what we found is that there were specific instructions,

training manuals which caused the salespeople to operate as

they did, but as company directors, ultimately, they are responsible

for the actions of employees, and it's as simple as that.

These guys come across as businessmen,

and that's really how they like to portray themselves.

The reality is that they have a more dark and sinister side,

shall we say.

Scambusters and Trading Standards had the company bang to rights,

and it was time for three company directors to face the courts.

The third company director pleaded guilty to a range of offences

under the Consumer Protection From Unfair Trading Regulations

at an earlier hearing.

With all the evidence against Wright and Watkinson,

Trading Standards hoped they'd hold their hands up to the charges,

but sadly, that wasn't to be.

Stalling tactics were used by the defendants.

Changing pleas, using different barristers,

so it's been a very, very long process.

But to no avail, as the judge asked to hear from some of Wright

and Watkinson's victims in court.

People were able to come to court and give a real heartfelt version

of what had actually gone on inside their own homes.

Watkinson and Wright were both found guilty of two counts of

conspiracy to defraud, and sentenced to five years each behind bars.

The judge stated that they displayed a "wholly arrogant

"and uncaring attitude" and showed "not a jot of remorse".

Justice may have finally been served,

but for the company's victims, their legacy continues.

My aunt felt embarrassed.

People of her age, they trust everybody,

and she trusted in this guy, and then she felt foolish afterwards.

So how can you and the ones you love avoid these scams?

Well, don't be bullied into buying something you don't need.

You must be prepared to say no.

There are loads of companies out there that you can use, so don't

necessarily just buy from the company that contacts you, you know.

Make sure that you're initiating the contact, and do your research.

Realise that you have got rights, you've got cooling off rights.

If you're not happy in any way, always report it to somebody,

and, you know, that company will usually be Trading Standards.

For more information about how you can avoid falling victim

to scams like these, log on to...

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

about some of the latest scams out there.

Today we're looking at a con where scammers are putting false

information out into the public domain for their own devious ends.

It's called the reverse PIN scam.

How does it work?

You'd receive an e-mail which presents itself as originating

from Crimestoppers,

and that e-mail says that if you're at a cashpoint

and you're suspicious of the person behind you

and you're worried they're going to steal your card

or PIN, you can enter your pin in reverse, and that would

alert the police who would immediately come to your location.

But that's not true.

How do they stand to gain from it?

They're trying to create this myth

so that the public are lured into a false sense of security,

when all they're doing is giving the criminal a second chance to

see their PIN, and also extra time to rob the victim and then escape.

If anyone received this e-mail, just ignore it,

and let your friends and family know that it's a complete scam.

Crimestoppers' advice - always keep your PIN secure

and shield it from view at cashpoints.

Fraudsters will for ever be coming up with new ways to get you

to part with your cash, but armed with a little bit of knowledge,

you can be one step ahead of them.

Stay safe. I'll see you next time.

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