By lovemoney.com
Jun 26, 2012
The Insolvency Service warn the older generation to be careful after finding 78 rogue companies that prey on older people with scams worth £28 million.
The Insolvency Service has uncovered 78 companies that were guilty of scamming older people out of their hard-earned money.
The service, which investigates and shuts down dodgy companies, found that one in ten of the firms they looked into between April 2009 and March 2012 had conned over 2,000 elderly people out of approximately £28 million.
The Insolvency Service is now working with Age UK, the Alzheimer's Society and Action on Elder Abuse to highlight how vulnerable sections of society are being exploited.So what sort of scams should the elderly and their carers be aware of?
More scams to watch out for
• Telephone bank card scam on the rise
• How to get your money back after a scam
• This fairytale is nothing but a scam
Landbanking companies
Of the 78 companies investigated by the Insolvency Service, 49 were involved in so-called landbanking scams These involved 'hard sell' techniques where a salesman offers plots of land with the promise that the investor will be able to develop there at some point in the near future and make a substantial return.
This is not illegal but the land is usually sold to the investor without the necessary planning permission and in some instances is in fact green belt land which is protected from development by law and so is in reality worthless.
Robert Burns, Head of Investigation and Enforcement for the Insolvency Service, confirmed that not a single landbanking company that the Insolvency Service investigated produced a profit for an investor.
Case study: Century Property Group Ltd
Century Property Group Ltd, formerly Century Land Group Limited, was forced into liquidation by the High Court in April 2012 following an investigation by the Insolvency Service. It was found that the company exaggerated the investment potential of land, claiming that the plots they were selling had considerable development potential when there was no evidence to support this.
The investigation found that 228 plots of land had been mis-sold to the public, making the company £10 million. The company managed to trick one family into investing £600,000.
For more information on Landbanking please see here.
Mobility product retail scams
Mobility retail scams typically target the elderly and involve home visits or phone calls where aggressive tactics are employed to make a sale.
Case study: Reo Marketing Ltd
Reo Marketing Ltd sold orthopedic products to elderly people. It used telesales staff to cold call people and convince them to let a salesperson make a home visit under the guise that they would be participating in a survey.
In reality the company used the opportunity to send agents in who used high pressure tactics and lies to make a sale. For example, sales representatives would make false claims about the medical benefits of a product and sometimes pretended to represent social services.
The average age of this company's customers was 79 years. Home visits were reported to have lasted hours and some customers told how they had been followed around the house. The only way to get rid of the salesperson, in most cases, was to agree to the purchase.
The company had a turnover of £1.3 million in less than 10 months attained by high pressure sales, a confusing pricing structure and non-existent discounts. The company marked-up the price of the products, in one instance by 1,326%. They also were guilty of breaching data protection and VAT laws.
The Insolvency Service wound up this business in the public interest in March 2012.
Abridged (Worthwhile to go to SOURCE for the whole article)
SOURCE: MONEY.AOL UK
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