We put the word out, asking you to tell us about the rip-offs that make you rage.
And you didn't let us down.
Sharp practice.
There isn't a story too small
or an issue that we feel we can't take up on your behalf.
Who can you rely on? People believe they're being ripped off and indeed they are!
We are Rip Off Britain!
You contacted us in your thousands.
You've written to us, emailed in and even stopped us in the street.
It's a blatant rip-off.
I feel aggrieved by it.
Somebody's making a very lot of money on this.
Somebody should take that up.
Our team has travelled the length and breadth of the UK
to hear your stories.
Now it's time for us to investigate on your behalf.
This is Rip Off Britain.
Hello. Welcome to Rip Off Britain,
the series that investigates your consumer concerns.
These are very tough financial times
so it's never been more important to keep a close eye
on exactly where your money is going
and to ensure that you're getting what you think you've been promised in return.
But as we all know all too well, that can be far from easy.
Judging by the letters you've sent us,
the stakes can be incredibly high.
Also on the programme, the consumers who pay the price for their own mistakes.
Plus gambling on a better future.
The pension pots that don't pay off.
And problems with probate.
Will your will leave you out of pocket?
You're just opening the drain, throwing the money down and it's gone!
The battle for our hard-earned cash is well and truly on.
And when every penny counts,
you need to make sure you're getting the best deals possible.
You've certainly given us plenty to work with.
Sooner or later, we all have to think about how we'll manage when we retire.
Many of us will have spent years investing money
in the hope that it will provide for us in later life.
But what happens when what you thought to have been a safe bet
turns out to have been a rank outsider?
Investing your cash is a bit like going to the races.
Last time round!
You never know what the outcome will be.
Do you back a risky outsider which may have high returns?
Or play it safe on the favourite?
David Mason was trying to make decisions like these
when he heard about an investment that sounded as if it would really last the course.
Four quid on number two, please. Four pounds on two.
His son, Alex, had recently started working for an investment company.
He thought he'd come across a fund perfect for his dad.
He came home one day and said he'd found an investment, a potential investment,
that looked very safe, very secure, and would perhaps give myself a return on the pension fund I had,
together with a few small investments I'd got at that time.
I was looking for a safe return. I was happy with a low return.
But I didn't want to see my money frittered away.
So when he heard about the CF Arch Cru Finance Fund,
which was advertised as "cautious", it really seemed to fit the bill.
All the meetings I had, all the discussions I had,
suggested this was a safe return
and certainly comparable, if not better, than what else was on the market at that time.
The total I invested eventually was £126,000.
David wasn't alone.
Thousands of people paid around £400 million into the fund.
And from the off, they performed well.
In just three years, David's own investment increased by £31,000.
But there was a nasty shock coming up on the outside.
In the middle of 2009, suddenly trading was suspended.
Suspension lasted for six or seven months
and then I suddenly received notification
that my investment was almost halved.
Overnight, I was £80,000 worse off. Obviously I felt quite guilty about that,
for introducing my dad to what I believed, and a lot of people around me believed,
that it was a safe investment.
Fitting what my dad was after.
Everyone knows the value of shares can go down as well as up.
But this dramatic fall in a supposedly safe fund
got the Masons questioning where their money had been invested.
I subsequently found that Arch Cru had been investing
in some very risky markets.
Gareth Thatchett is a solicitor from Regulatory Legal.
He thinks there needs to be more protection for people like Alex and his dad.
Any scheme that says everything is very low risk, you have to be very careful with.
It's the "low risk" hook that brings people in.
The Arch Cru fund was sold by financial advisors who believed it was a safe bet.
The investment manager, Arch Financial Products,
is no longer involved in the running of the fund.
Currently I'm showing a loss of around £80,000.
This does affect my thinking of whether I could take early retirement or not.
I do feel very let down.
So what can you do to make sure you don't back the wrong horse?
The three things that you always need to look out for
is the track record of the fund manager.
Whether the fund is FSA authorised and regulated so you've got security,
and never, ever invest over £50,000 in any one fund.
That's the top limit of the Financial Services compensation scheme.
The investigation into the Arch Cru fund could take three to five years.
And there's no guarantee David, like others, will get his money back.
I understand that investments can go up and down.
I accept there's a lot of people out there in this last recession
have seen their investments drop.
I had not put my money into a high risk position
of the type that Arch Cru were.
I would have been happier to sit with my money under the mattress.
You know, your will is arguably one of the most important documents you will ever sign.
But the worrying fact is, only half of us actually have one.
In recent years we've been encouraged to make proper provisions
and that push has been accompanied by a sudden burst of companies
who all claim they can meet your needs for less money than a traditional solicitor.
The problem is, other than in Scotland, these firms aren't regulated.
You've been telling us they can end up costing you more money, not less.
Two years ago, pensioner Margaret Walker from Ramsgate
came across an advert for a will-writing service.
The price on it was just £49
so she and her former partner arranged for a salesman to come to their home.
Various members of my family, right up to my own parents passing,
there's always been problems with the wills.
I didn't want that to happen with my partner and myself
when we bought this house.
We decided we would get wills leaving each of our halves
to our family members.
But almost as soon as the salesman arrived, there was a problem.
He asked us actually what we wanted to be put into the wills.
We each of us told him what we wanted.
He said it sounded a little bit sort of difficult
and it might not be as simple
to be able to be fitted into a £49 will.
And that it would take a bit more work and so it would be more expensive.
And it just gradually went from there.
The salesman suggested that a personal estate plan might be Margaret's best option.
He kept talking about this package, this plan,
where everything would be done for our executors.
He said it would be much cheaper to go through his company to do that
than to go through solicitors and banks as they would charge a lot more money.
And he just sort of then slid the price list across
after we'd decided to go with the plan
because it sounded to be pretty fair for the money he was talking about.
And he said two grand, or just over two grand.
It sounded feasible.
My understanding is that Margaret's situation wasn't too complicated for a £49 will.
I understand she wanted to make provision for her partner and loved ones.
That's a fairly standard situation and could have been dealt with under a standard will.
I'm really horrified and upset that a vulnerable person like Margaret
has paid for so-called legal services that she didn't require.
Margaret has a very modest estate and any monies that she does have upon death
should be passing to her chosen beneficiaries, not to anyone else.
The real problem we have here is that these people are not regulated.
There is no way of policing what they're doing
and if you have a problem, there's no-one to help you.
The exact cost of the package was £2,400,
too much for Margaret to pay outright.
But the salesman had a solution.
A loan agreement with interest which she could pay back over five years
at £52 a month.
The final bill had risen to £3,142.20,
not including a £100 deposit.
I actually panicked and said, "No, I'm sorry. You've wasted your time.
"I can't afford this."
My partner said, "Between us we could probably manage it."
Which sounded a lot better.
So really all I wanted was to get him out of the house by this period.
I said, "OK. I'll go with it, then, for all that I was."
Margaret needed a straightforward simple will which should have cost in the region of £100.
She didn't need anything else at this point in time.
After her death, her executors would have been free
to take such advice as they needed at that time.
They could have gone to see a solicitor at that time
and it would probably have cost something like 400 to £500
to deal with Margaret's estate if that's what they wanted to do.
Alternatively, they could have gone to the probate registry
and dealt with the estate themselves at no cost.
Margaret says the salesman spent several hours at the house
and it was dark by the time he left. She's diabetic
and by this point she was getting worried about her sugar levels.
I did need to get some food inside me.
I couldn't very well get up and start making sandwiches
without offering him something and I wasn't about to do that, I'm afraid.
I had made various cups of tea during the course of the evening
while he was chatting away to my partner.
But that wasn't enough and I was getting a little bit heady.
I didn't take everything in, as I should have done.
I didn't read all the paperwork. The print was so tiny.
I couldn't see. My eyesight was going a bit bleary.
So I couldn't read it properly anyway.
I didn't need to sign it but I didn't think.
The thing is, I'd arranged for him to come.
He'd sat there giving us his time.
I felt guilty saying, "Go away, I don't want it."
That is the sort of person I am.
I always feel I'm in the wrong.
And in this case, I was -
through not sending him away!
Margaret has regretted it ever since.
Two years on, she's still paying £52 every month.
She and her partner have remortgaged their home
and a recent valuation has revealed there's no longer any equity left.
Her relationship has also come to an end.
It's like having a loan and not actually doing anything with it.
You're just opening the drain, throwing the money down
and it's gone.
You're not getting anything back for it.
There's no reason to have this will.
There's no reason for me to have this loan.
Unless somebody can tell me how to get out of it, I'm stuck with it
until I've paid it off.
And I'm very angry about that.
But Margaret's had a breakthrough. She's explained her change in circumstances to the company
and for a fee of £150,
they've agreed to cancel the will
and settle the loan agreement on her behalf.
She's been allowed to cancel the loan agreement which is good news.
But remember she had to pay £100 deposit,
she's made loan repayments amounting to £1,400 to date
and she's had to pay £150 to cancel.
So she's still very severely out of pocket.
Also, the starting point here was that Margaret had a very modest estate.
Margaret's relieved the matter can now come to a close.
But she remains £1,500 out of pocket
and still without a will.
And she dearly wishes she'd never seen that advert in the first place.
If you die without leaving a will, the state decides who gets what.
It can get complicated and it can take a long time to sort out.
Basically, it's something that you want to avoid at all cost.
So what exactly do you need to know?
It's fairly easy to prepare a will.
There are various ways that one can go about this
from do-it-yourself packs that you can buy in stores
to appointing a professional to help you draw up your will.
The typical fees for professional services for will writing
are under £100.
The OFT have found that in over half the cases,
solicitors and professional will writers will charge £100 or less.
An executor is a very important person under your will.
It's a legal requirement that you appoint an executor
who is responsible for administering the estate according to your wishes.
The OFT has found that charges for the Executor's service
can range from 3,000 all the way up to £9,000 for an estate of the average value.
It's not necessary to have a professional executor.
It's not the law that you have to appoint an professional.
It's a decision for the consumer to make
but the consumer might choose to appoint a friend or family member
as their executor.
Also, a lay executor, a friend or family member
can choose to appoint professionals to assist them
in the administration of the estate after you die.
Still to come on Rip Off Britain:
the land investments that promised the earth.
And the savings funds that have hit troubled times.
Earlier, we heard from Jennie about the Arch Cru investors
who have seen their funds frozen as a result of what the company has called "a financial crisis".
In some cases, people have lost up to 40% of their savings
and it's thought they might not be able to get at the rest of their money for up to five years.
At a small jewellery shop in Greenock in Glasgow,
Ken McArthur is hard at work.
He and his wife, Lynne, have been putting in extra hours over the last few years,
building up their businesses.
Currently we own the shop we're in just now
and we also own another one property. We have a flat.
We were working hard towards our retirement.
Now, it's well-publicised that you just can't rely on a state pension.
You can't rely on banks providing you with interest rates
that are going to achieve a decent standard of living in your retirement.
We've actually got very specific plans for retirement.
We intend to sell up all the assets that we have
and make sure our family's provided for,
and then we intend to certainly go to live in Europe.
Our initial plans were to buy a motor home,
tour Europe and spend the remainder of our lives doing that.
So, motor home plans in place,
Ken and Lynne managed to save £50,000.
They decided to invest it, which is when they heard about Arch Cru.
Arch Cru investments, it was a family member that brought it to our attention
that it was performing very well.
We went to a financial advisor and looked at what was on offer.
At the time, it seemed like an excellent deal for us.
Arch Cru's glossy brochures coupled with the advice of an independent financial advisor
convinced Ken that his money wouldn't just be safe,
it would also bring in a very good return.
'We were told that it was a low-risk investment and that's what we were looking for.'
We were told that you could expect two or three per cent above base.
And in truth, that sounded to me very believable
and it looked as if it was something that would suit us ideally as a couple.
Reassured by the figures and the level of risk,
Ken and Lynne invested their £50,000.
Hi, there.
But 18 months later, they received some shocking news.
'It was a letter through the letter box. It fell on the floor.'
I opened it and it was absolutely devastating to find that the fund had been suspended.
It is literally... Your world just literally implodes at that second.
You think instantly that the money's gone.
That's how we genuinely felt, that the money had just disappeared,
there and then in that one letter.
The fund was suspended because of an apparent lack in liquidity.
This is defined as "the ease with which a company can sell assets
"in order to raise money for investors keen to cash in on their holdings."
All Arch Cru's remaining assets were frozen
while the authorities launched an investigation to find out what had gone wrong with the fund.
This meant that the McArthurs and everyone else who'd invested in it
were unable to access any of their money.
We were told that the fund would be invested in small companies.
It would be micro-managed and the money would never really be at risk if it was in any of these funds.
One of the investments was £92 million, invested in a Greek shipping line.
That's seven ships. Now, in my way of thinking, £92 million invested in one company
in seven ships can't possibly be low risk.
Could I see the pink one? No bother at all.
Ken and Lynne had thought that at this stage of their lives they'd be happily retired
and travelling in Europe.
Instead, they're having to work twice as hard
to build up their reserves once again.
Our investment today, in my view, is worth absolutely nothing.
The reason I'm saying that to you is I can't get at it.
Is that just you?
The fund is frozen. It's ceased to trade.
Although the shares do have a value,
in my way of thinking, I can't release that value in any way, shape or form.
There you go. £56, please.
I can't go tomorrow and get the money back from Cru.
In my view, it's worthless.
With an investigation into the management of Arch Cru's investment funds ongoing,
Ken and Lynne have been left in financial limbo.
It's thought it could take five years for the situation to be resolved.
Even then, there are no guarantees on what money will be returned to investors.
'That day you open the letter
'and you find out you've lost every penny you've invested with the company
'I don't think I'll ever forget that.'
It's a "world-stops-turning" moment for you.
When you actually have to sit down and read the letter on two or three occasions,
and you find out that your money's basically gone.
At this point, we turn our attention to land.
We farm it and build and live on it.
For many of us, owning a plot is simply a dream come true.
If it's a sound business investment as well, what could be better?
But for some, spending their savings on a slice of the good life
hasn't quite turned out the way they planned.
On his retirement Dr Sateesh Mehta
was considering what to do with some of the earnings he'd saved during a long career as a GP.
He thought that land sounded like a good option.
I chose this investment because I felt that land investment
would be a better return than the stock market,
which is very volatile.
At that time, land prices were shooting up to the sky.
And thereby the house prices were also going up.
Not that I was going to build a house on this site.
But the plot could be sold to whoever aspirant it might be.
This is called land banking.
It involves companies selling plots of land with a suggestion of big returns in the future.
These firms offer to handle the planning permission application process for plot owners.
They claim that once it's granted,
they can sell the whole site to a developer for a substantial profit.
I first heard about it sometime between June and July 2004.
When I first contacted the company, I had repeated phone calls
wanting that the plot was being sold rapidly
and if I didn't show an interest within a certain period
then, of course, it would be too late.
Impressed by the likelihood of the land increasing in value,
Sateesh signed up to buy two plots,
one in Cumbria and one in Oxfordshire,
for a total of £15,000.
The principal reason that the company says they bought the site
is that "it is separated from the village only by two fields.
"These are owned by a very prominent local landowner
"who's currently in very advanced negotiations to obtain planning permission on both."
But yes, you've guessed it.
There's a catch.
While the companies are keen to suggest the likelihood of planning permission being granted,
in Sateesh's case, that hasn't materialised.
No specific dates were mentioned on the return.
But we were to understand it would be within two or three years.
And now we are six years on.
There has been no response.
Whether the company is still in existence, I don't know.
People who invest in land
rarely need to visit their plots.
But today, Sateesh is off to Cumbria to see exactly what his money has bought him.
Hello.
He's meeting up with local solicitor Paul Smith along the way.
'I would like to see the land in Leasgill to see what size of plot it is
'and to learn if there is going to be
'any planning permission grantable.'
Right. So your plot is just here on the map.
I think it's just by the side of this gate, in fact.
The gate is about there.
So it's just inside the field.
We'll just try and find your plot, where we think it is.
Now, looking at the plan,
the gate is just here.
Right. And we're about the third plot in.
I think we're over here somewhere.
For years now, Paul has worked as a solicitor on behalf of people like Sateesh.
People who've bought land on the understanding that planning permission will not be problematic,
but where the reality is very different.
In some cases he says his clients have lost their entire life savings.
This is your lovely building plot. Mm-hmm.
Next to a septic tank.
Right.
But it has no chance of getting planning permission. Really?
What do you think?
Well... Do you think it was worth 8,000? I don't think so.
It seems Sateesh's land banking experience is far from unique.
Basically, the sales pitch induces people to invest in these plots
but the plots they buy, the fields they buy,
have little or no chance of ever getting planning permission.
But when the people come to sign the contracts to buy the land,
they're full of exclusion clauses
so they can't rely on any misrepresentations that the sales force had made.
That's just one of the problems.
If a developer ever showed any interest in this land,
the fact that there are so many plot holders here would make developing it almost impossible.
On this field, we have 100 plots.
If at any stage planning permission was granted,
every plot owner would have to be contacted
to transfer their land to the developer.
Like thousands of similar pieces of land across the country,
this plot remains a wasteland years after being snapped up by an investor.
I have not come across one person who's actually made some money
from purchasing one of these plots.
I've yet to find a field that's got planning permission that's been sold by a land banker.
So what exactly is being done to stop this sharp practice?
There has been a clamp-down on many of these land banking schemes by the FSA
on the grounds that they're unauthorised collective investment schemes.
These land banking companies do spring up again under a new name.
If you go onto the internet, I'm sure you'll find one or two still operating.
My advice to anyone thinking of investing in one of these schemes
it to keep well away. It's basically a rip off.
Advice that sadly has come too late for Sateesh.
My thoughts are simply, "What a waste of money that has been!"
It's...
..8,000 down the drain
and nothing to show for it.
As we've seen so far today,
investing large sums of money is very rarely risk free.
So what do you need to consider before you hand over any of your hard-earned cash?
Ian Martin from Citywire has some priceless advice.
Before making any investment, you need to think about your priorities.
"Do I have any debts? Should I pay those off first?"
Secondly, everyone should have some money set aside for a rainy day
in case of emergency.
What does risk mean to you?
Everyone has their personal view of a risk and how much they're prepared to lose in investment.
If you want to get more return on your money, this means taking more risk.
It's a fundamental rule in investment.
You simply can't escape it.
Don't put all your eggs in one basket.
Don't invest in something that you don't understand.
It's another simple rule. Read it through. If it's still not clear,
no shame in saying, "This isn't for me."
Protect yourself from scams and con artists.
If someone cold calls you at home offering you shares or investment advice,
put the phone down straightaway.
The financial watchdog has banned cold calling.
No reputable financial services company will contact you in this way.
Investment is a long-term game.
Everyone's heard the stories of traders and bankers making a quick buck.
But for most people, it's a long-term project.
Stock markets can go up. They can go down. But it's the long-term picture that I'm interested in.
Think about tax. Whether you have a buy-to-let property or you're investing in shares,
you could incur an income- or capital gains tax liability.
But for many people, a good way to start investing in a tax-free way
is to have stocks and shares ISAs.
If you need advice, you need an independent financial advisor
with a chartered and certified financial planning qualification or the gold standard.
Secondly, you need an advisor who will work for you on a fee basis,
like your solicitor or accountant.
They'll be looking after your interests, not theirs.
The battle for our hard-earned cash is well and truly on.
And with every penny counting,
we're here to make sure you're not being ripped off.
And you've certainly been keeping us busy!
These days, an increasing number of us
have a phone, digital TV and broadband in our homes.
In many cases, the same company may be providing us with all three.
But equally, it's not uncommon to have contracts with separate providers.
But which makes most sense financially?
Charles Ponsonby, the chief executive of Simplifydigital.co.uk
is here to shed some light.
You need a working phone line to get the majority of broadband services.
If you don't have a working phone line, a number of deals allow you to get a great deal
while connecting your phone line at the same time.
Research shows that families can save up to £360 a year
just by looking at the deal they're currently on.
Aim to bundle your services together from one single provider.
There are some great deals that start from £18 a month for TV, broadband and phone.
Look at your requirements when selecting the package.
Do you want TV in high definition? Do you require a wireless or wired connection?
What download limit do you need?
Are daytime, evening and weekend calls important?
All these affect what package you should buy.
Deals are advertised in the press and on TV.
Great headline rates at 6.99 and 6.49. Three months free.
But they really only tell half the story.
When you factor in line rental, the prices can fluctuate rapidly.
If you buy a package with a small download limit,
and start to use it for data rich activities such as watching video online,
you'll find your data allowance is quickly eaten into.
This can mean you can be charged for overuse
or even upgraded to the next package.
Your postcode will also have implications one what packages are available.
For example, fibre optic is only available to 50% of the UK population.
If you live in rural areas, you'll also find the packages available are quite different.
Today we've been hearing from people who've invested large chunks of their life savings
in funds that have hit troubled times.
When this happens, the impact can be devastating
as our viewer Carol Scholes knows all too well.
After spending 15 years of long days
running a grocery shop in Wisbech, Cambridgeshire,
Carol Scholes was looking forward to her retirement.
I decided enough was enough.
Getting up at half past five in the morning,
going to bed at ten, dead beat.
Seven days a week.
I got very tired
and I really wanted to move on to something else.
I decided to sell the business
and invest the money.
And look forward to a comfortable retirement.
Carol was keen to invest her money wisely.
Can you see the birdies?
And with £260,000 in play,
she didn't want to take any unnecessary risks.
I certainly did not want to take any risks.
And I asked for a no-risk policy
with no stock market involvement.
Because at that time, the markets were very volatile.
I just wanted a safe place to put my money
to give me a secure monthly income.
Carol explained this to a financial adviser
who recommended that she put her savings into an income fund
run by an investment firm called Keydata.
Out came the Keydata pamphlet.
"This is the interest we can get for you."
And it looked good because at that time,
interest was all over the place.
So it looked like a good recommendation.
I was totally assured that there was no risk with that.
It was all underwritten properly
and it was all overseen by the FSA.
It was pretty water-tight and gold-plated. No risk involved.
Carol took out the plan at the end of 2006.
It provided her with a monthly income of around £1,600.
But earlier this year,
that stopped.
I realised that the payments for January had not gone into the account.
And when I queried it, I was told that there was a hiccup.
But it would all be sorted out quite soon.
But that didn't happen.
By June, the investment fund had gone into administration
leaving Carol and thousands like her facing financial ruin.
I don't know what the problem is, really.
And I don't know when I can expect a payment
or be able to withdraw the money I invested.
Hi, darling. Had a good day?
Yes, about, thanks.
I've received no income for the last nine months.
I'm living off the remains of the proceeds from the sale of the shop.
And that is going down very fast.
I'm lucky enough to be able to live with David.
So I have a roof over my head
which I probably wouldn't have had if I was on my own.
Carol says the whole situation has really taken its toll.
I don't sleep well. I'm on medication for anxiety.
And medication to help me sleep at night.
Otherwise, I'd be up at two in the morning, pacing the floor.
And that is stress.
In total, it's thought around 30,000 customers have lost £450 million
in the Keydata collapse.
It is now the subject of an investigation by the Financial Services Authority.
The Serious Fraud Office has also been called in.
The UK's financial services compensation scheme
has paid policyholders a total of £42 million.
But that doesn't cover the money lost.
Carol is facing a potential loss of more than £200,000.
If it came to rely on compensation,
at that level,
I would be totally devastated
and totally...mortified
and I would feel thoroughly betrayed.
I was told that the money was water-tight
and that the fund it was going into was fully regulated
and underwritten.
So there was no need to worry about it.
And I did believe them.
Carol and other investors in her position
are now pursuing legal action to try to get their money back.
But she knows there are no guarantees.
The worst-case scenario for me
is that all the hours that I've put in at the shop
now appears to have gone in a puff of smoke.
Through wrong advice.
If I don't get this money back,
I will be totally devastated.
And I don't want to use the word, but destroyed.
I'm with Richard Saunders, the chief executive of Investment Management Association.
Mr Saunders, perhaps you could just explain what is the role
of your association and how it actually represents the industry.
The Investment Management Association is an industry body.
Its job is to represent the industry to regulators, to governments
both here and in Europe.
And more broadly.
As part of that we run a sector classification system
which groups funds into sectors
which are broadly similar in character to funds that are in the same sector.
So that enables the investors to have an initial filter of funds
but also to be able to compare funds of broadly the same type.
What is the criteria for something that is high risk as opposed to medium or low risk?
What is high risk to one investor may not be high risk to another investor.
Let me give you an example.
If you're 25 years old and saving for a pension in 40 years' time,
then putting your money into a building society account
would actually be quite a high risk thing to do
because you'd be exposing yourself to losses because of inflation
over a long period of time.
And actually the best investment strategy for somebody there
might be to have a strong exposure to the stock market
to get the long-term returns of the stock market.
Somebody who is just coming up to retirement, on the other hand,
it would be the other way round.
So what's high risk to one investor isn't necessarily high risk to another.
So when a financial advisor says, "Do you want a high risk investment, medium risk or low risk investment?"
should the person investing their money say, "Don't use those terms. Where will you put the money?"
I would say that somebody who walks into the financial advisor's office
and says, "I'd like to invest some money",
any adviser who responds, "High risk, low risk or medium risk investment?"
is not doing their job properly.
We have people who invested in a company
where they believed that they were investing in low risk investments.
Only to discover that the money was being put into Greek shipping and countries in Africa
which may or may not be regarded as stable.
How can that happen that someone can sell something which is supposedly low risk
when clearly there is quite a high element of risk involved?
If an adviser had a client who wanted low risk investment,
what you described to me does not sound like a suitable piece of advice.
So on the face of it, the client might well have a case with the Ombudsman.
One of our viewers, Carol Scholes, who invested in Keydata,
she invested above the £50,000 limit which is protected by the government.
Why would she or other people be allowed to do that?
I think people are allowed to make choices about what they do with their money.
I'm very sorry to hear about that case, obviously,
but at the end of the day,
people have to be free, surely, to make their own choices about what they do with their money.
Do you think that your members, and indeed anyone involved in investing,
always necessarily warns people that if they invest more than £50,000
it's not going to be covered by any kind of government guarantee?
There's a key difference between products which are proper fund products
and products which are not, like structured products issued by banks.
The compensation applies
when the product provider has gone bust.
What sort of action can people take
if they believe they've been mis-sold a product?
If they feel they've been mis-sold a product, then go to the financial ombudsman.
The Ombudsman is a very customer-friendly body.
It doesn't cost a lot of money.
And a good number of people who it turns out have been mis-sold
do get compensation.
So it still is a very risky business where you put your money
because there are no guarantees and no real safety nets.
Investing carries risk.
Life is risky.
There is no way of investing without risk.
If you follow my three golden rules of don't put your eggs in one basket,
if you don't understand it, don't buy it,
and if it sounds too good to be true, then it is too good to be true.
If you follow those three rules,
then you'll stand a better chance of managing the risk.
Mr Saunders, thank you. Thank you.
Well, the stories you've shared with us today
have shown that investing large sums of money can be a risky old business.
The law states that when it comes to investment funds,
you need to be informed of the extent of the risk before you hand over any cash.
Our experts have told us if you're considering investing your life savings,
you really should get some independent financial advice
before you make any lasting decisions.
With that excellent piece of advice we come to the end of today's Rip Off Britain.
We hope you can join us again next time
when we'll be sharing more of your stories.
Until then, from all of us, goodbye! Thanks for your company. Bye-bye!
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