FSA bans Bournemouth insurance broker

The FSA has banned Peter King and his firm New Forest Mortgage Company Ltd for knowingly submitting applications for fraudulent life assurance policies.

Mr King submitted applications for 39 fraudulent life assurance policies – 30 of which were in the names of applicants whose personal details were either wrong or who knew nothing about the applications – in order to benefit from commission payments of more than £250,000.

Mr King admitted that his plan was to submit the policies, claim the commission and use the money to settle substantial outstanding debts - he is now bankrupt.

Competition Commission proposals on payment protection insurance

The Competition Commission is proposing banning the sale of payment protection insurance (PPI) by a distributor to a customer within 14 days of credit being sold, though consumers woul be able to contact the distributor for PPI 24 hours after the sale.

Credit providers will be required to provide a “personal PPI quote”, which will clearly state the cost of the PPI policy individually and when added to the credit product.

Happily, the Competition Commission is also proposing a ban on the sale of single-premium PPI policies, which it says act as a barrier to customers switching and the costs of which are difficult to compare with other PPI policies.

It is inviting feedback on the proposals until December 4 and will publish its final report in January 2009.

The Association of British Insurers has slammed the proposals, saying they will leave millions of consumers unprotected.

They would say that. No one is saying that PPI should be banned. Just that the banks shouldn't have an unfair advantage in selling their very profitable single premium PPI when a loan is taken out.

FSA targets 'phoenix' mortgage firms

The FSA has vowed to crack down on mortgage firms that close down and immediately resurrect themselves in an attempt to avoid debts.

FSA fines rise

Fines issued by the FSA in the first 10 months of the year totalled £20.5m, up almost four-fold from £5.3m in the corresponding period of 2007.

In October this year alone, the FSA enforced fines totalling £7.2m, much higher than the fines of £5.3m imposed in 2007 as a whole.

FSA fines AWD Chase de Vere Wealth Management Ltd £1.12 million for mis-selling

The FSA has fined AWD Chase de Vere Wealth Management Ltd £1.12 million for serious failings in its pension transfer, pension annuity and income withdrawal business that resulted in mis-selling.

The firm mis-sold some pension transfers and pension annuities by recommending products to customers who already had adequate existing pension provisions or whose attitude to risk did not match the products recommended to them. The firm has estimated that as many as 800 of its customers may have received unsuitable advice in relation to 1,200 sales between February 2006 and October 2007.

The FSA also found that the firm sometimes failed to properly disclose the risks and costs of the products it recommended, and was also unable to demonstrate the suitability of its advice from its own records in 39% of the transactions which were reviewed. Based on a sample of recommendations, the FSA found that 28 per cent of transactions resulted in mis-sales.

The Firm is a major independent financial advisory firm and made about 4,300 sales of pension transfers, pension annuities and income withdrawals to approximately 2,800 customers between February 2006 and October 2007.

FSA calls for action on boiler rooms

The FSA has called on authorities around the world to help tackle a fraud that brings criminals about £300 million yearly from the UK public.

Each year, around 30,000 people fall victim to boiler rooms in the UK alone – estimates put the total fraud at £300 million. Typically, victims can be ‘groomed’ over weeks or months by fraudsters who call them regularly, eventually persuading them to buy worthless shares.

Boiler rooms are based overseas, often in Spain, Hong Kong or North America. But their victims tend to be in the UK, Germany, United States and Scandinavia.

Anyone who has been cold called by companies offering to sell them shares can report this to the FSA by calling its consumer helpline 0845 606 1234 or by using the online form available on its consumer website www.moneymadeclear.fsa.gov.uk.

Boiler rooms target investors in several ways:

• High-pressure cold-calling to offer attractive share opportunities
• Selling at inflated prices US 'Regulation S' shares which are banned for sale to US investors;
• Recovery room fraud - offering to buy shares, for an upfront commission, back from people who bought their initial shares from a boiler room;
• Threatening unspecified 'legal action' and freezing the assets of potential shareholders who decide not to purchase shares, forcing them to go through with the trade.

The FSA says it receives an average 5,000 consumer enquiries a year on boiler rooms.

You can check whether a firm is authorised by the FSA, or if the firm calling is on the list of 500 known unauthorised firms which illegally target investors.

Norwich Union fraudsters jailed

Two failed Zimbabwean asylum seekers who were Norwich Union employees have been jailed for five and a half years after stealing customers' personal details and using them to steal hundreds of thousands of pounds from policy holders. They had been working in an area which involved looking at unclaimed assets and had effectively pretended to be policyholders themselves to gain access to the cash.

Customer claims Abbey calltaker hijacked his account

The Mail reports Mr Bates' claim that an Indian call centre worker employed by Abbey froze his account and changed his identity as revenge for criticism of the service he'd received.

Mr Bates tells what happened here.

AIG Enhanced Fund Victims Action Group

They have a website here.

Beware of 'prize draws'

The OFT has warned about a new twist to prize draw scams in which the victims are unwittingly being used to help defraud others.

Consumers received telephone calls out of the blue claiming that they had won an international sweepstake or prize draw worth up to £500,000. The victims were told that in order to claim their winnings they needed to pay 'refundable' taxes and insurance fees and were asked to send payments by money transfer to the scammer in Canada.

The twist came when victims were later informed by the scammer that their prize had arrived at a UK airport but that further sums of money were required for its release. Victims were told to send personal cheques, often for thousands of pounds, to UK 'agents'. These 'agents' turned out to be other victims of the same scam who had been duped into acting as 'money mules', banking the cheques and innocently transferring the money to the scammer overseas. Victims receiving the cheques, who often had exhausted their own life savings, were told by the scammer that the money was from 'sponsors' to help pay the required release fee for their prize. None of the victims received any financial advantage for being 'money mules.

Victims were encouraged by the scammer to borrow large sums of money once their life savings had been depleted and some have lost upwards of £50,000. In one instance, the scammers targeted the widower of a victim who had died.

• If you're told out of the blue you've won a prize in a draw you didn't enter, how likely is that to be true?
  
  Don't give them your money.

Standard Life announces bonus cut

Standard Life has announced it is cutting final bonuses on its with-profit plans. It will also increase and extend market value reductions.

Most with-profits customers will see a fall in the value of their plan, says the provider.