P.L.writes: I needed to rethink my finances after a relationship break-up and I contacted the Marcus James Group in Essex for advice. It arranged to remortgage my home to fund a down-payment on a property in Cyprus that it suggested would be a great investment for me. I have had nothing but problems ever since, and have been committed to an arrangement that is unaffordable. I complained, but the firm says it is simply an ‘introducer’ and will take no responsibility. I have lost more than £30,000.
Broken dream: Victim's flat in Paphos, Cyprus, is still unfinishedWhen you split up with your partner you wanted to remortgage your home to raise money towards a settlement with her. At the same time, you had a badly performing pension plan so you needed advice on saving for later life. You also had a poor endowment that was supposed to pay off your interest-only mortgage but was clearly going to miss its target.
You needed advice on how to save towards redeeming the mortgage before retirement. Not surprisingly, you consulted a local firm registered with the Financial Services Authority – Marcus James Financial Services.
But in an almost bewildering sequence of events, you emerged with a fresh mortgage of £125,000, far more than you wanted or needed, and a large chunk of this went as the deposit on an apartment still to be built at Paphos in Cyprus.
This apartment was supposed to become an investment towards your retirement and the mortgage was supposed to become affordable because it was at a low interest rate. But the mortgage was in Swiss francs. Any shift in exchange rates could cost you a fortune.
I asked Stephen Dodd, boss of Marcus James, for a copy of the Fact Find that his firm would, or should, have prepared. This is the basic document advisers prepare, showing details of your income, circumstances, aims, and willingness to take risks. I also invited him to comment on what you told me.
‘I will respond to you as soon as possible,’ he said. Then a fortnight later, Dodd gave me a seven-word statement: ‘We will not be making any comment.’
With your approval, I used the Data Protection Act to issue a formal demand to him, compelling him to hand over a copy of the Fact Find and any other personal information he held about you.
What happened next was curious. I received two large envelopes. One contained details of your mortgage, the other held details about the Cyprus property deal. The first included a letter headed ‘MJ Financial Services’, a second had a letter headed ‘Marcus James Overseas Property’. Both letters were signed by Dodd.
You have told me you had been dealing unwittingly with two separate companies, both run by Dodd from the same address. And at some point, the adviser who was recommending a big mortgage turned into a salesmen selling off-plan apartments in Cyprus.
While the mortgage is fully regulated and protected by the FSA, speculating in foreign property is not. I asked Dodd to say whether he ever explained that halfway through the proceedings you lost all investor protection guarantees.
I asked again for a copy of his basic Fact Find, if he prepared one. And I asked why he recommended a Swiss franc mortgage that exposed you to big exchange rate risks. And I also asked him why, among all the papers about you, he had sent me paperwork relating to two other clients. He failed to respond.
Instead, his lawyer told me that as you had now begun proceedings to sue Dodd’s firm, ‘it is inappropriate for our client to debate what occurred with a newspaper’. In that case, I wondered, what was it that stopped him debating for all those months before your patience cracked and you sued him?
You have been left deep in debt and you have told me there are question marks over your title to the unfinished Cyprus flat as the developer appears to have borrowed against the value of the land. It will be interesting to see how Dodd and his company defend themselves in court, and I look forward to reporting it.
I just hope they can come up with the documents they seem to have had such trouble producing over the nine months I have been pressing for them.
More... TONY HETHERINGTON: Santander denied it had lost my £10,000 FSA puts 'sale and rent back' deals on hold after review shows poor practice in the sector Santander blames the customer (again)
S.B.writes: My son lost his Santander bank card. When he reported this next day, the bank informed him without warning that his account was shut down for a serious breach of security, and he would have to make other banking arrangements. Nobody would tell him anything more. All we could find was that the previous night someone had tried to deposit £10,000 into my son’s account and then transfer it out again immediately.
Santander was investigating whether my son was involved. At the time, he was a 23-year-old student, living at home, with a student overdraft of £1,400. Santander then hounded him to repay this, and after it issued a default notice, I paid the money, but this has still left a stain on my son’s credit file.
Financial Mail has reported a series of frauds that have left Santander customers out of pocket or under threat from the bank. First, their cards are lost or stolen. Then crooks either deposit a forged cheque into the account or transfer funds from someone’s online account that they have hacked. Finally, they use the innocent person’s card to arrange a withdrawal of the funds in cash.
By the time Santander realises the cheque is forged, or by the time the online account-holder realises savings have vanished, it is too late. The money has been withdrawn. Santander then turns on the person – like your son – whose account was used as a halfway house and holds that person responsible. In this case, the scam did not work.
The £10,000 came from the account of a haulier in Wales, but Santander will not say whether it was an online transfer or a forged or stolen cheque, and will not say what made it suspicious enough to block it.
For your son’s sake, it is a good job the £10,000 did not go through, or he might be facing a demand to repay it. I did ask the bank whether it informed the police, but it would not say. It did say, though, your son had agreed to pay off his overdraft at £80 a month, but had fallen into arrears.
Because you paid the debt promptly when the default notice was issued, the bank has removed the record of this from your son’s credit agency file so he can move on with a clean sheet.
THE UPDATE FILE
The City’s regulator, the Financial Services Authority, has issued a public warning advising investors not to deal with EV Business Limited, the crooked east London firm exposed last Sunday by Financial Mail.
The FSA says EV Business, which is offering interest of up to 18 per cent a day on short-term deposits, is not licensed to handle savers’ money and is not covered by the official compensation scheme in the event of problems.
EV Business claims to have more than 165,000 investors, but as I reported last week there is no sign of it at its only published address, where the company’s mail sits in an open cardboard box awaiting collection. Since last Sunday, complaints have been mounting as depositors have tried and failed to withdraw their cash.