Category: Fraud

Legal Aid Fraudster to Pay £22M

John Blavo ran Blavo & Co. solicitors. He specialised in mental health law and clinical negligence.

But his real speciality was creating fake legal aid cases and charging the government for non-existent cases.

In fact, over 23,000 such fake cases in three years.

He and his family lived the high life – mansions, supercars, holidays around the world etc.

His company doesn’t seem to have been especially talented at making the fake cases – but the Legal Aid Agency carried on paying out even when there were no records of the cases he was claiming for.

Eventually the Legal Aid agency did begin to suspect and started to investigate.

Between April 2012 and March 2015, he claimed fees from for representing clients at mental health tribunals in 24,658 cases but only 1,485 cases had actually happened.

In November 2015, Blavo & Co. was shut down by the Solicitors Regulation Authority.

A high court judge ruled that although Blavo & Co was doing about 1,000 cases per year they were claiming for about 9,000.

As sole shareholder of Blavo and Co, John Blavo was ordered to pay back £22 million but he has not actually been convicted of any offence yet. He is under investigation, but why are the Police taking so long?

No wonder the legal aid is so high if this shows the quality of checks they make before paying out.

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TSB Punished by Customers

A recent poll by Which magazine shows that TSB is now regarded as poor and rated even lower than RBS and other lenders responsible for the financial crisis.

In February 2018, TSB was highly ranked by its customers as a bank you can trust, but then the sky fell in for the bank when their new IT systems that hadn’t been tested sufficiently collapsed and many customers were locked out of their accounts for days or weeks in some cases.

Some customers had accidental access to other people’s accounts, the bank had little idea of what to do and their communication with customers was poor leaving many very angry at what happened.

To make matters worse, many fraudsters jumped on the bandwagon and began sending fake emails and making calls to TSB customers, leading to a large number of frauds.

The problems led the FCA to begin an investigation with the Prudential Regulation Authority.

Up to 1.9 million people using TSB’s digital and mobile banking found themselves locked out of their bank accounts following the migration of data on customers from former owner Lloyds’ IT system to a new one managed by current owner Sabadell.

TSB CEO Dr Pester told MPs on the Treasury Committee that he took “absolute responsibility” for the problems, but said the migration of billions of customer records was successful “to the penny” and the underlying engine of the bank was “working well”.

Paul Pester lost his job but the damage done to consumer confidence will take a long time to recover.

The problems had a simple cause – inadequate testing of the new systems in order to save time and stay on schedule.  That was a bad judgement.

The lesson is clear – do not take risks with customer data as you may end up very sorry.

If you’ve had bad experiences with TSB – let me know by email.

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Bait and Switch Scams

A company offers a fantastic deal to draw customers to the business, but when you contact the business you find that the deal is not available. The company then tries to convince you to buy something else. This is called bait and switch and is a very common ploy.

Bait-and-switch scams are commonly found in newspapers and are also common on Craigslist. A bait-and-switch does not typically involve selling phony or non-functional products; the overpriced products and services work as advertised. Some customers may not even realize that they were victims of a bait-and-switch scam.

Laws Regarding Bait-and-Switch

  1. You can complain to the advertising authority and you can sue for false advertising.
  2. Manufacturers or distributors of the product or service used as bait can also sue the seller for trademark infringement, on the grounds that the seller uses trademarked images of the product or service in their advertisements with no intention to sell them.

However, sellers have not committed a crime if they try to push customers towards another product, as long as the original deal is available. Sellers are not liable if they mention in their advertisements that the products have limited availability, so customers should always read the fine print.

Warning signs of Bait-and-Switch Scams include: offer is too good to be true, the fine print is misleading or confused, there is no information about the company and its registered office, there seems to be no stock of products still being advertised, sales people appear and try to convince you to buy other products instead of the one you selected.

Beware the bait and switch.

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New Banking Code on Fraud

Authorised Push Payment (APP) fraud is where a fraudster convinces the victim to transfer money to them, usually under the guise of an authority, the victim’s bank or a supplier. Once transferred, the money is likely to be transferred again and then difficult if not impossible to retrieve.

Traditionally the banks have treated these frauds as being the victims own fault and normally refuse to provide reimbursement. However many of these frauds are very sophisticated and difficult for the victim to know they are being defrauded until it is too late.

Also, the banks practice of simply following instructions and sending money to anyone at any account without any checks means they do little to prevent these frauds and often act too late after they are informed of a problem and the money and the fraudster are gone.

A new draft voluntary code for banks aims to make it more difficult for the perpetrators of these frauds and more likely for the victims to get recompense.

The new code establishes the principle that if customers take “the requisite level of care”, they should be reimbursed by their bank.

However, the code does list eight ways that banks can justifiably refuse to reimburse customers who have been defrauded. These include cases where customers:-

  • refuse to heed warnings from their bank
  • “recklessly share” their security credentials
  • fail to take steps to make sure they person they paid was who they thought they were
  • fail to be honest with their bank
  • are “grossly negligent”
  • fail to heed a confirmation of payee result (see below)

Questions also remain about who is liable when both the bank and the customer appear to have taken all the necessary steps to prevent fraud.

Customers were scammed out of £503.4m between January and June, according to the finance industry’s own research.

Favoured methods include duping victims into paying in advance for a product or service that doesn’t exist or impersonating a trusted organisation such as the police.

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Noel Edmonds and Lloyds Bank Fraud

The website at http://noel.world/  Is Noel Edmonds website covering his battles with Lloyds Bank.

http://banklloyds.claims/   is about media coverage of Noel’s fight with Lloyds.

Noel Edmonds is well known as a radio presenter from the 70s and latterly as a TV presenter and game show host. He was also a businessman who built several businesses but then lost almost everything due to the actions of his bank HBOS.

Lloyds bought HBOS bank in 2009 to rescue it from bankruptcy and with it came a Pandora’s Box of issues including corruption and deliberate damage to many of Britain’s small businesses.

What Happened

The Reading branch of HBOS carried out practices that deliberately and systematically ruined small businesses and the team led by Mark Dobson made a great deal of money from this.  Mark Dobson was jailed for dishonest conspiracy in February 2017.

Tthe bank had referred small businesses to a corrupt turnaround consultancy, Quayside Corporate Services, where they were then loaded with debt and looted.

Unique, a holding company for several of Noel Edmonds’ business interests, had taken a loan that was secured against its assets, including shares in UBC, another company owned by Noel Edmonds.

When Unique needed to repay its loan, it could have sold shares to get the money but under the contract with HBOS this could only happen with agreement by HBOS. Dobson and crew refused that permission – preferring the company to go bankrupt.

It gets very complicated after that, but the courts found serious criminal behaviour had occurred and you would think that would be sufficient for Lloyds to investigate the truth and compensate those damaged by the criminality.

The circumstances of the company’s failure are now the source of a bitter dispute between Lloyds and Mr Edmonds. Noel Edmonds is seeking £300m in compensation over claims that HBOS and its disgraced former employee in Reading, Mark Dobson, deliberately destroyed Unique a decade ago.

Lloyds has faced severe criticism for its treatment of the scores of small businesses that were victims of the fraud, which may have cost the bank more than £1bn. Lloyds denied that any wrongdoing had taken place for more than a decade and refused to compensate those who were affected.

Events finally forced Lloyds to say it regretted and apologised “for the effect the criminality relating to HBOS Impaired Assets Office in Reading has had on customers and we continue to make good progress in the customer review in settling compensation, with 60 per cent of customers now having received offers”.

The bank said it was progressing with mediation in Mr Edmonds’ case “where all these points will be addressed, through the proper legal process”.

However, they have not paid up.

Bankers have only themselves to blame for the mistrust many feel towards them.

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Fakespot Identifies Fake Reviews

The website at www.fakespot.com/ was created to “Bring trust back to the Internet” say the owners.

Fakespot is a data analytics company that wants to change the way people read reviews and similar content.

They believe that authentic user reviews are just about the best thing to come out of the Internet. However, the user review system is often abused by sellers that pay for reviews, by companies trying to make their competition look bad, and technologies that pretend to be real reviewers.

How to Use Fakespot

Fakespot can scan all of the reviews for any product or service you select on Yelp™ or Amazon™, Trip Advisor and Apple APP store and tell you whether the reviews are generally reliable or generally unreliable through the letter grade system.

With so many online shopping options, a strong or weak product review can have a huge impact on whether or not a purchase is made. The credibility of these reviews is undermined by businesses who leave fake reviews for themselves or for their competitors – or by individuals with an undisclosed bias.

Fakespot does not review products so cannot tell you how good a product is, it simply analyses the existing reviews looking for patterns that indicate authenticity or otherwise.

Fakespot uses various techniques to evaluate the authenticity of reviews, including:-.

  • English language pattern recognition
  • The profile of the reviewer
  • Correlation with other reviewer data

The algorithm uses machine learning to constantly improve itself by looking at profile clusters, sentiment analysis and cluster correlation. We use artificial intelligence that has been trained to pick up on patterns. The more data that flows into the system, the better the system gets at the detecting fakes.

Amazon unverified reviews are considered unreliable by Fakespot because when the system associates a product review with a product purchase, that review is from a “verified purchaser”. These reviews are in most cases reliable, since Amazon has already confirmed an actual purchase of the product being reviewed.

But, if an Amazon review is not from a ‘verified purchaser’ there is no way of knowing for sure if the reviewer even used the product. While it is possible that a reviewer could have purchased the product elsewhere and left a review on Amazon at a later date, without purchase verification, it is impossible to tell.

Also, Fakespot systems have shown that most paid reviews come from unverified purchasers.

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The Impact of Fraud on Victims

As part of the government’s annual figures on fraud, they include ‘experimental’ figures of different ways to analyse the data.  This includes statistics on the emotional and physical impact of fraud.

These show that where there has been financial loss, the most common effects are:-

  1. To feel ashamed, embarrassed or to blame oneself
  2. Loss of time / inconvenience
  3. Stopped using specific websites
  4. Time off work
  5. Physical health problems

Where there has been full or partial reimbursement of losses, there is a lot less of the negative feelings of embarrassment, shame and self-blame.

However, many people do not report any such symptoms.

If you are a victim of fraud – do not blame yourself as the fraudsters get a lot of practice in such deceit and successfully deceive people of all ages, races, level of education and expertise.

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