James Bryce looks at the huge proliferation of cons and scams at work on the Costa del Sol this summer
TO paraphrase Douglas Adams in The Hitchhiker’s Guide to the Galaxy, ‘if it looks like a scam, and sounds like a scam, it probably is a scam’.
But despite this, thousands of consumers in southern Spain continue to be duped into parting with their hard-earned cash by devious fraudsters using increasingly elaborate schemes to do it.
It comes as no surprise that one such international ‘lottery scam’ – indeed the biggest of its kind ever to be busted – was based in Malaga.
Linked to the Nigerian mafia, the group of 53 fraudsters, is accused of sending millions of spam emails – and official letters – to random accounts around the world, claiming the recipients had won the Spanish lottery.
Victims, who numbered thousands around the world, each paid an administrative fee in order to claim their ‘winnings’.
In total it is estimated the conmen sent up to 25,000 emails and letters a day and approximately one in 500 people acted on them.
In total, they are estimated to have made up to 250million euros.
Unsurprisingly this method of making money has proliferated greatly over the last few years.
The so-called mass marketing scams typically begin with the sending of emails, texts and letters in a bid to entice their victims into handing over bank details and other personal data.
And judging by the figures, it seems to be an effective ruse.
Authorities estimate that around 40,000 fraudulent letters leave Spain each day en route to victims around the world.
This is despite Spanish police arresting more than 400 people and identifying more than 400 bank accounts used in fraudulent lottery schemes over recent years.
The UK’s National Fraud Authority recently reported that British consumers lost an eye-watering 3.9 billion euros last year to mass marketing scams.
Citizens Advice – a charity set up to offer guidance to those with legal and financial problems – estimates a massive 840 million unsolicited phone calls were made in 2009 by firms offering to manage debt.
The equivalent of 38 for every UK home.
Meanwhile, an estimated 111 million unwanted emails and text messages are sent every day, according to comparison website uSwitch.
It is exactly the same in Spain.
Indeed, a straw poll conducted in the Olive Press office to find out how many junk emails are received each week revealed a figure in the hundreds.
Many of these emails are aimed at stealing your personal and financial information, a scam commonly known as ‘phishing’.
Cyber fraudsters are increasingly looking to exploit the economic downturn by offering anything from flats to festival tickets online in exchange for upfront fees.
Boiler room share scams
Another tried-and-tested scam that is particularly popular with Spanish-based fraudsters targeting British customers are the so-called ‘boiler room scams’.
These scams, in which fraudsters use high-pressure sales techniques to sell worthless or non-existant shares, cost British investors 220 million euros a year.
When the Olive Press exposed one scheme in Alhaurin el Grande, run by seasoned boiler room boss Terence Wright, last month, we were amazed at the huge sums being taken.
In total, hundreds of thousands of euros are being syphoned off from clients each month and put into a variety of nefarious schemes.
The profits and kickbacks to the conmen are large and it is unsurprising that, when approached, they don’t normally like to talk.
“I was amazed at how much money was passing through during my time with the deck in Alhaurin,” explained one source who worked with Wright for a number of months.
“In the end I felt my moral conscience could no longer work knowing that people – many of them pensioners – were losing their nest eggs to sleaze.”
Carbon Credit schemes
One of the latest scams involves schemes to buy so-called carbon credits.
These essentially use the same tactics as boiler room scams, but selling a different product.
In one case, an elderly woman agreed to purchase 4,000 euros worth of carbon credits after being contacted by a firm called CarbonTrace Solutions.
After attempting to back out of the deal, the woman was threatened with litigation by the company.
The Financial Services Authority (FSA) has had some recent success in tackling the problem.
Last month the organisation secured its first criminal conviction for boiler room fraud when David Mason was jailed for two years for a bogus share scheme.
But as potential victims become increasingly wary of the risks posed by boiler rooms – much in part due to the publicity they receive in the media – so the fraudsters are changing their tactics.
New techniques being used by boiler rooms include cloning details from the FSA register in a bid to appear legitimate.
In several cases, existing reference number’s of legitimate firms listed on the register have been used as well as the actual name’s of legitimate companies.
Other boiler room scams becoming increasingly popular include ‘recovery schemes’ in which the fraudsters target those who have already fallen victim to boiler rooms, claiming they can recover their money.
Insisting they pay a small upfront fee of between 250 and 600 euros, they will then go about getting their money back. Of course, it never happens.
Cash back schemes
Then of course there are the famous ‘cash back’ schemes, which were popular with the likes of former conman Garry Leigh, who died on the Costa del Sol in a car accident last year.
One of Leigh’s cash back schemes involved his company offering to buy unwanted timeshares and then persuading people to spend thousands of euros on membership of Leigh’s Designer Way Vacation Club.
The deal was that buyers were promised some or all of their money back after five years but never received it, mostly due to impossible terms to follow.
Auto trader con/SEO optimisation and fake escorts
Other scams popular with the likes of Antony Muldoon and his cohorts was an ‘Auto Trader’ con where his staff cold-called from Spain anyone attempting to sell their car in the UK.
Muldoon – who is currently facing a hefty prison sentence in the UK for fraud – and his numerous companies also offered scams including a fake escort service, debt elimination and a search engine optimisation (SEO) scam by which they promised to improve third party websites.
Gas inspection scam
Gas inspection scams are also causing a problem for residents in Spain.
Representatives claiming to be from gas companies are knocking on people’s doors to carry out an ‘obligatory’ inspection.
The resident is then charged hundreds of euros for replacement parts or a new certificate.
Perhaps the most infamous scam of all, particularly to those with links to Spain, are related to timeshares.
These scams vary in size and format, but would typically involve the selling of non-existent properties or taking money from people to put their existing timeshares on the market.
Some even involve offering legal services to people who had been victims of other timeshare frauds.
One such victim is Sally Boon, 64, from East Anglia.
She lost 5,300 euros after falling victim to a timeshare scam following the death of her husband.
She was unable to afford fees on her timeshare apartments, one of which was in Tenerife. She initially handed over 1,300 euros in upfront fees in 2007 after being cold called by Golden Sands Marketing, which claimed it could find a buyer for her timeshare.
Then in January this year she was contacted by Customer Mediation Services, which told her she had been the victim of a timeshare re-sale scam and that it could get her money back for her.
She gave them 4,000 euros but has not being able to contact them since Easter.
“This has made me sick with worry. I feel like I’ve been so gullible, but these people are so convincing. I wouldn’t have fallen for it if my husband had been alive,” Boon said.
The employees are also often conned
Sid Jones, salesman, Marbella
“I worked for a company called European Advisory Service in San Pedro after seeing an advert in Sur in English. The company had loads of information on people who had bought timeshares going back 10 years. What surprised me the most was how much information they had on people. We had to cold call them and ask them whether they were happy with their timeshare. We had to say that we were planning to take a class action with those who had been mis-sold timeshares. To start legal proceedings, all they had to do was pay the equivalent of 10 per cent of what they had originally invested. When we started they said we would be on a basic salary of 900 euros a month and would earn commission on top of that. They would recruit a team and avoid paying them for three months or so and then when the employees got wise to it they would be replaced by another load of recruits. I had to chase them really hard before they agreed to pay me.”
What you can do to protect yourself
• Protect your bank details. Never give any personal information to firms which cold call you. This information could be sold on and you will find yourself on other firms’ hit lists.
• Ignore spam text messages. Never respond to these messages. If you do, the firm at the other end will know you are a ‘live’ customer.
• Read the small print. Whenever buying goods or services you will often be asked in the small print if you are happy for your information to be passed to third parties. Firms often have separate boxes for companies inside and outside of their group with the questions set up so that you need to tick one and leave the other blank to avoid having your details sold.
• If you suspect a scam, call Action Fraud – run by the National Fraud Authority – in the UK on 0300 123 2040.