Practical Property Portfolio - Fraud Hearing

Gateshead firm's bosses conned investors in property scam
By Matt McKenzie (Sundaysun.co.uk)

Five company directors funded a lavish lifestyle by ripping off investors during a multimillion-pound property scam, a court heard today. John Potts, Peter Gosling, Natalie Laverick, Eric Armstrong and Peter Graham conned investors out of an estimated £80m.

The five did not just feather their own nests they also ensured the loyalty of staff at Gateshead-based Practical Property Portfolio with plush offices, large salaries and generous bonuses.
Nicholas Dean QC, prosecuting, told Newcastle Crown Court: "The prosecution are not suggesting that these defendants set up the investment scheme as a fraud from the start. The scheme became a fraud for one main reason - the defendants, and particularly Potts, were both greedy and careless."

"Their greed meant that the scheme became a fraud and could only be continued as a fraud."
"Greed, driven by Potts, meant that income became the focus of PPP’s business at the expense of prudent acquisition, refurbishment and management of property."
"The extravagant use of investors’ funds extended to most aspects of administration of PPP particularly in the form of excessive wages, bonuses and commissions paid to staff."
"The defendants bought loyalty and hard work from employees and also achieved a willingness amongst some employees to turn a "blind eye" to the shortcomings of the scheme."
"Above all the defendants rewarded themselves very generously."

The defendants had faced a four-month trial at Newcastle Crown Court charged with conspiracy to defraud between January 2001 and March 2003 when PPP was closed down.
However, last month Potts, 60, of Silksworth Hall Drive, Sunderland; Gosling, 57, of Rothbury Gardens, Lobley Hill; and Laverick, 28, also of Silksworth Hall Drive, admitted the conspiracy charge.

Graham, 62, of Topcliffe, Sunderland, admitted three counts of fraudulent trading and Armstrong, 55, of Moorside North, Fenham, Newcastle, two fraudulent trading counts.
Today they returned to Newcastle Crown Court for the start of a three-day sentencing hearing.
The court was told that during the period of the conspiracy, investors were persuaded by false and misleading information to invest in the company which bought houses and flats - many in run-down areas - for refurbishment.

But scores of investors were to discover properties - across the North East, Yorkshire and Lancashire - had not been renovated or tenanted and were sometimes derelict or even burnt-out shells.
"The vast majority of investors never saw the property they were allocated and relied upon the literature and what they were shown by salesmen - it is clear we say that the salesmen only showed potential investors properties that would create a favourable impression," said Mr Dean.
Mr Dean said that Potts "oozed warmth and confidence'' in order to seal a deal with a potential investor.

One investor, Margaret Patrick, had bought a property in Gower Street, Sunderland, for £25,000. She was later to discover when visiting it with her husband Philip, that it was burnt out following a gas explosion and the rest of the houses on the road had also been bought by PPP.
"Mr and Mrs Patrick visited 20 Gower Road on September 29, 2002 - they found a burnt out derelict shell of a house in a street of burnt out derelict shells," said the prosecutor.

The video the Patricks made of their visit to the abandoned street - showing graffiti of "The Gazza Strip" (sic) sprayed on a wall - was played to the court today. Another investor, chartered accountant Brian Fox, who lost around £500,000 in the scam, even took senior managers from the now-collapsed HBOS Group to a meeting with PPP to consider investments.
"He attended (a meeting) with a representative of the Bank of Scotland, who were considering investing with Mr Fox - a glimpse too of how banks became involved in the acquisition of "toxic" assets," said Mr Dean.

Many investors learnt of the scam only when the Department of Trade intervened, because they lived outside the North East or even abroad and had never seen the properties concerned.
The company attracted around 1,750 investors, many of whom lost significant sums - including Mr Fox who was conned out of £500,000 and others who lost their life savings.
At the time the company was wound up, investor claims totalled £16m. However, PPP had claimed that its portfolio of 3,211 properties was worth £80m - meaning each property was worth around £25,000, which equalled the cost of a single investment.
PPP and its spin-off firms used adverts in national newspapers, brochures and a slick sales pitch to persuade investors to part with their money.

The court heard that PPP had been set up in the late 1990s and its offices were based at the Team Valley Trading Estate in Gateshead. Alan Trevitt, who was an early investor in setting up the company before leaving prior to the fraud starting, told investigators of how Potts operated.
He describes Potts as "having total control over the running of the company and he made all the decisions," said Mr Dean.

"Gosling did everything he was told including acting as Potts’ chauffeur when Potts wanted to impress clients." "Trevitt thought Gosling was a pleasant but weak individual who did exactly as he was told by John Potts." The former Department of Trade and Industry closed down PPP and its associated companies after a High Court petition. The prosecutions were brought by the Serious Fraud Office, who carried out a four-year investigation in conjunction with Northumbria Police’s economic crime unit.

The hearing was adjourned until tomorrow.

Fake Villa Scam In Turkey

Irishman questioned in £10 million "property scam"

AN IRISHMAN has been questioned in a £10 million ‘fake villa scam’ which is believed to have duped dozens of British and Irish families in Didim and Bodrum. Kevin O’Kane was taken in by police in Didim and taken to Bodrum yesterday for questioning about falsely marketing 41 villas at Golden Beach Villas, at Imbat Bay, in Altinkum.

Police in Bodrum are investigating claims that as many as up to 80 families may have been swındled based on promises of luxury villas in Bodrum and Altinkum which O’Kane and his business partner Kubilay Atmaca were not entitled to sell. O’Kane has been released on police bail while the inquiry continues. He has had his passport confiscated.When he appeared before a court in Bodrum yesterday as part of the criminal investigation, O’Kane said; “I have been advertising the villas in Altinkum and Bodrum at international real estate and tourist fairs. “I also purchased a villa and have not received the deed yet. I too have been treated unjustly and have no idea about sales involving fake deeds.” His passport has been confiscated while enquiries continue.

Victims, including Tom Barry, from Northern Ireland, have spoken of handing over £75,000 each for the three-bed luxury villas. In one case, three members of one family paid a total of £225,000 for three villas only to find later that they did not actually own them. At least eight Irish citizens applied to police headquarters and the prosecutor's office, and the Northern Ireland Police have launched an investigation after receiving 80 complaints on this issue. Özlem Arslanparçası, the lawyer representing eight Irish citizens who purchased villas in Golden Beach Holiday Resort said the number of the defrauded people is increasing each day.
Police are still searching for 38-year-old Atmaca, a taxi driver two years ago but now in the construction business, and his 40-year-old wife Hande Bakkal.

They are also accused of selling villas with fake deeds, but have managed to evade police capture.

Courtesy of Altinkum Voices Newspaper

Investment Warning - MyCreditBrokers

Vienna, 26/03/2009

Pursuant to Article 4 para. 7 of the Bankwesengesetz (BWG; Banking Act), the Financial Market Authority (FMA) is entitled in individual cases to disclose to the general public by publication in the official gazette "Amtsblatt zur Wiener Zeitung", or in any other official bulletin with nationwide circulation, the name of a company not entitled to carry out certain banking transactions (Article 1 para. 1 no. 3 BWG).

By publication in the official gazette "Amtsblatt zur Wiener Zeitung" of 26 March 2009, the FMA is exercising this right and warns against the conclusion of banking transactions requiring a licence with the following provider:

MyCreditBrokers
04085
Kiev
Prospekt Frunze 22 OF 135
http://mycreditbrokers.com/

This provider does not possess a licence issued by the FMA to carry out certain banking transactions in Austria. Therefore, the provider is neither allowed to conclude loan agreements nor to grant loans (credit business) on a commercial basis.

Courtesy of Financial Market Authority

Investment Warning - Legacy Global Wealth

Vienna, 26/03/2009
Pursuant to section 92 para 11 of the Wertpapieraufsichtsgesetz 2007 (WAG; Securities Supervision Act), Austria's Financial Market Authority (FMA) has the right to inform the general public, in individual cases by way of announcement on the Internet, in the official gazette "Amtsblatt zur Wiener Zeitung" or any other official paper with nationwide circulation, that a particular company is not entitled to provide certain financial services (section 3 para 2 nos. 1 to 4 WAG 2007).

By publication in the official gazette "Amtsblatt zur Wiener Zeitung" of 26 March 2009, the FMA is exercising this right and warns against financial service transactions requiring a licence with the following provider:

Legacy Global Wealth with alleged business location:
Via Barberini 3/A,
Rome 00187
Italy
Phone: +39 0660 5131 20
Fax: +39 0660 5131 40
http://www.legacyglobalwealth.com/
admin@legacyglobalwealth.com

This provider does not possess a licence issued by the FMA to provide investment services in Austria.

Therefore, it is neither allowed to provide investment advice regarding financial instruments, nor portfolio management, i.e. managing portfolios for individual customers who authorise a room for manoeuvre, provided that the customer portfolio contains one or several financial instruments. Furthermore, the provider is also not entitled to accept or transmit transactions, provided that such activity involves one or several financial instruments.

Courtesy of Financial Market Authority

Repossessions on the rise says FSA

Repossessions on the rise says FSA

A total of 46,750 properties in the UK were repossessed during 2008 - an increase of 68% on 2007 figures, according to the financial services authority (FSA).

However, it said banks are taking measures to avoid ejecting homeowners from their properties where possible meaning that many of the repossessed properties will be buy-to-let, abandoned or will have been used for property fraud. The number of properties being taken into possession during Q4 2008 was slightly lower than it had been over the previous quarter, but this was still 60% up on Q4 2007. The regulator’s results also showed a rise in the number of borrowers falling into arrears, up 31% from 2007 to 377,000 at the end of 2008.

Research company Datamonitor in a report today called 'UK Buy-to-let Mortgages 200' said a greater percentage of buy-to-let properties had been taken into possession at the end of the first half last year than properties in the mainstream mortgage market. Roderick Logan, who wrote the report, said: 'This trend is set to continue, as there is less reluctance on the part of lenders to repossess properties if the owner lives elsewhere and owns a whole portfolio of properties. Other factors have also contributed to an increase in repossessions such as relaxed lending policies which enabled property fraud and property owners abandoning their properties. 'As a result, the increase in repossessions is not as bad as the headline figure suggests and can serve to expose activities such as illegal property fraud.'

Courtesy of Propertyweek

Madofff's arm to be sold.

Arm of Madoff's firm set to be sold to Castor Pollux

NEW YORK (Reuters) - The market-making arm of jailed swindler Bernard Madoff's firm is set to be sold to Castor Pollux, a Boston financial company, for $500,000 plus future payments of up to $15 million, according to a statement by a court-appointed trustee.

Madoff, 70, pleaded guilty on March 12 to running the biggest investment fraud in Wall Street's history, which prosecutors have said involved as much as $65 billion. His Bernard L. Madoff Investment Securities LLC had a market-making business and an investment advisory business. The fraud took place in the investment arm but the entire operation is still under investigation.
Now, unless a better bid emerges in an auction that is being overseen by a bankruptcy judge, the market-making business will be sold to Castor Pollux, the designated "stalking horse" in the bidding process.

Under the current bid, Castor Pollux would buy the infrastructure and intellectual property of the business. The sale would exclude cash and securities related to the business. Castor Pollux would pay $500,000 right away, then make payments of up to $15 million based on certain criteria through 2012, according to the statement by the court-appointed trustee. The court-appointed trustee Irving Picard, a New York lawyer, noted the difficulty of selling the division.
"We have faced many challenges in this process," he said in a statement. "The initial proceeds reflect that the business has not been operational since December 12 and that significant capital is required to restart operations."

Picard is working with the Securities Investor Protection Corp (SIPC) to recover as much of Madoff's assets as possible to sell or collect money to give to his defrauded customers.
The trustee said this week that so far he has located just more than $1 billion. SIPC was established by Congress in 1970 to maintain a reserve for investors of failed brokerages.

Courtesy of Reuters

SEC OBTAINS EMERGENCY ASSET FREEZE TO HALT ONGOING FRAUD

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20968 / March 23, 2009

Securities and Exchange Commission v. International Realty Holdings, Inc., et al., United States District Court for the Central District of California, Civil Action No. CV 09-01945 DDP (JWJx)
SEC OBTAINS EMERGENCY ASSET FREEZE TO HALT ONGOING FRAUD

The Securities and Exchange Commission today obtained an emergency court order to halt an ongoing scheme by a Palmdale, California company and two individuals who have defrauded investors through a series of false claims including that Warren Buffett is associated with the company.

According to the SEC's complaint, International Realty Holdings, Inc. (IRH), Ottoniel Medrano (a prison guard at California City Correctional Center), and Leticia Isabel Medrano have raised hundreds of thousands of dollars from investors in several states since October 2008. The defendants defrauded investors by falsely claiming, among other things, that Warren Buffett is IRH's "Honorary Chairman," that Berkshire Hathaway and Credit Suisse are involved in the investment, and that IRH has $4.8 billion in total assets and owns various properties throughout Asia. After obtaining money from investors, the Medranos transferred funds to offshore bank accounts.

The SEC's complaint, filed in federal district court in Los Angeles, CA, charges IRH and the Medranos with raising at least $485,000 and likely more than $700,000 in selling preferred stock in IRH. The rate at which the defendants have raised funds has increased substantially over the last two months, averaging about $250,000 per month. According to IRH's offering materials, defendants intended to raise up to $6 billion in the offering.

In its lawsuit, the SEC obtained an order:

(1) freezing the assets of IRH and the Medranos;
(2) requiring the repatriation of assets;
(3) requiring accountings;
(4) prohibiting the destruction of documents;
(5) granting expedited discovery;
and
(6) temporarily enjoining IRH and the Medranos from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC also seeks preliminary and permanent injunctions, disgorgement, and civil penalties against IRH and the Medranos. A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for April 2, 2009 at 2 p.m.

Courtesy of U.S. Securities and Exchange Commission.

Corrupt Equity Release Scheme - Landisbanki Aftermath

Deadline Landsbanki.

Victims of a “corrupt” equity release scheme run by the failed Icelandic bank Landsbanki face a strict deadline in a battle to save their homes. The failure of the scheme – a form of financial package already outlawed in the UK – has meant householders have racked up millions of Euros in debt after investments failed to perform and pay the interest on their loans as promised.

Now liquidators of the wholly-owned subsidiary Landsbanki Luxembourg, Franz Prost Deloitte SA, are forging ahead with plans to sell off any remaining assets from the deadline day – April 12th. However, Spanish lawyers acting for the Landsbanki Victims Action Group will use a legal team in Luxembourg to register claims against members’ property – making it clear that court action is underway in Spain for an alleged fraud and no action can be taken against the individuals. The action group believes Deloitte will not want a drawn out and expensive legal battle that threatens to dilute the remaining value of Landsbanki assets.

CRIME

And top lawyers Martinez-Echevarria Perez Ferrero – already acting for over 100 members of the action group – have launched a criminal case in Spain alleging the bank and financial advisors fraudulently mis-sold the scheme. The legal team is confident of winning an injunction under strict consumer protection laws to ‘ring fence’ property and have contracts with Landsbanki declared null and void.

Under the Landsbanki deal, asset-rich Europeans, many of them pensioners, were able to raise a loan against the value of their homes. They were able to take a quarter of the loan in cash and the remainder was invested in the bank’s Luxembourg subsidiary Lex Life. Sadly, it has become a poisoned chalice. Promised a loan for life with the investment paying interest on the loan and even providing an income, victims have seen the value of their holding shrink and debts rise.

This week Round Town News was told by action group coordinators John Hemus and Mike McInnes it was vital that anyone of the estimated 600 victims in Spain urgently get in contact and join the fight to save their homes. “This is the last chance saloon,” said John. “Anyone with any doubts at all must realise that unless they get in touch with us urgently, it will be too late.

BANK

“The bank has not told people of the deadline because they are trying to sell off remaining assets. “It is a matter of urgency – people must either decide to leave everything to chance – which means they have no chance at all – or get in touch.” Mike said there were Landsbanki victims in France who were also taking legal action against Landsbanki and financial advisors for fraud – although the case was presented differently because of the country’s different laws. “French lawyers are not only going after the bank to have the contracts declared null and void but are also seeking compensation for loss of earnings and the stress the whole thing has caused,” he said.

“I am following this up to see if we can do the same thing here in Spain.” Mike said the April 12th deadline was never communicated to the legal team in Spain and was only recently discovered. “It is quite serious because if claims are not submitted by that date, the liquidators will start saying certain assets were not disputed – those assets will be put in the pot for creditors.”

DIRE

“It means the consequences could be quite dire for victims – but everyone signing up will be taken care of by our lawyers. If there is anyone sitting on the fence, they should take action now.” He accused Landsbanki of being “very selective” in the information it communicated to clients and yet the bank and the administrations had been informed of legal action in Spain and France.

“It was not in the bank’s interests to impart this information to potential purchasers of the assets – obviously this will now change.” Mike alleged victims were dealing with “crooks and thieves” but now the reputation of Luxembourg’s banking system and its apparent lack of regulation was no on the line.

Written by Jack Troughton

Thursday, 26 March 2009

Courtesy of Round Town News

John McEnroe duped in art investment scam

NEW YORK (Reuters) - Former tennis champion John McEnroe was duped along with Bank of America, investment firms, art owners and collectors in a sophisticated $88 million (61 million pound) art investment scam revealed in New York on Thursday.

Art dealer Lawrence Salander, 59, was arrested at his New York home on Thursday, when he and his gallery were charged with 100 counts, including grand larceny and securities fraud, Manhattan District Attorney Robert Morgenthau told a news conference. Salander pleaded not guilty in New York's Supreme Court and his bail was set at $1 million. He faces up to 25 years in prison on the most serious charge. "We intend to vigorously defend against these allegations in the courtroom." Salander's lawyer Charles Ross said.

So far, authorities have identified 26 victims of Salander's scheme, including McEnroe, who lost $2 million after investing a half share in two paintings, Arshile Gorky's "Pirate I and II." The share in the paintings was sold at the same time to another collector, and McEnroe never recouped the money, authorities said. Morgenthau said the scheme, which lasted from 1994 to 2007, included luring investors who paid cash in exchange for shares of ownership of works of art. "He sold artwork not owned by him and kept the money and lured investment money in fraudulent investment opportunities," Morgenthau said. Salander used the money to fund "an extravagant lifestyle" of lavish parties and private jets, he said. At times, Morgenthau said, Salander inflated the value of paintings to score greater investments that were not returned to investors.

The investigation of Salander, the former owner of Salander-O'Reilly Galleries, continues. Other estates he looked after included paintings of the late father of actor Robert De Niro. Renaissance Art Investors, a company focused on investment in old master paintings, lost $45 million in the scheme, authorities said. Earl Davis, the son of American abstract painter Stuart Davis, lost $6.7 million, authorities said, while Bank of America lost $2 million after Salander lied about paintings he owned to secure a loan. Hester Diamond, the widow of late renowned New York art dealer Harold Diamond and mother of Beastie Boys' Mike D, lost $6 million, authorities said. McEnroe was alerted to the scheme when he learned an art collector owned the same painting he had, authorities said. A spokesman for McEnroe said he was on vacation and unable to be immediately reached. Most of the artworks, which are yet to be valued, are being held in the custody of a bankruptcy court in Poughkeepsie, New York. Many of the investors have filed civil claims against Salander and his gallery, which filed for bankruptcy and closed in 2007.

Courtesy of Reuters

Allied Irish Bank is to be investigated by the Serious Fraud Office

Fraud probe: The SFO is investigating a £56m property scam.

The SFO and City of London Police raided three business and residential addresses in central London yesterday, although no arrests have been made.

The allegations centre on loans made by the bank to the main suspect to buy UK properties, based on fraudulently high levels of rents and lease lengths.

Other financial institutions may also have fallen prey to the alleged fraudsters, the SFO added. The loans were made between 2003 and 2007, although AIB's corporate banking department uncovered the issue only last year before informing the authorities. The SFO said the suspect provided lease guarantees from a blue-chip property company which turned out to be false.

Companies linked to the fraudster are said to have set up leases for longer periods and at higher rents than existing occupational tenants. These additional leases increased the value of the properties involved, the SFO said. AIB, which is considering legal action against a 'number of parties' over its losses, refused to give any further details. It said: 'AIB identified the issue and referred it to the appropriate authorities. The writedown was fully accounted for in our 2008 results. 'We cannot comment further on the investigation at this stage.' The Dublin-based bank unveiled a 62% fall in annual profits to 1.03bn euros (£959m) earlier this month.

The loans were made between 2003 and 2007, although AIB's corporate banking department uncovered the issue only last year before informing the authorities. The SFO said the suspect provided lease guarantees from a blue-chip property company which turned out to be false. Companies linked to the fraudster are said to have set up leases for longer periods and at higher rents than existing occupational tenants. These additional leases increased the value of the properties involved, the SFO said. AIB, which is considering legal action against a 'number of parties' over its losses, refused to give any further details. It said: 'AIB identified the issue and referred it to the appropriate authorities. The writedown was fully accounted for in our 2008 results. We cannot comment further on the investigation at this stage.'

The Dublin-based bank unveiled a 62% fall in annual profits to €1.03bn (£959m) earlier this month.

Courtesy of This is Money

Key repossession ruling opens door to mortgage mis-selling complaints

Key repossession ruling opens door to mortgage mis-selling complaints Ombudsman's verdict offers hope for homeowners who are battling to keep a roof over their heads.

A remarkable ombudsman victory for a householder who had his home repossessed after being mis-sold a hefty mortgage could set a precedent, preventing others from losing their properties as the recession bites, lawyers say.

This year an estimated 75,000 families - against 40,000 last year - will lose their homes, according to the Council of Mortgage Lenders (CML).

But many who face handing back the keys could be helped by rules covering "suitable advice" for borrowers, buried in the handbook of the Financial Services Authority (FSA), the City regulator.

Andrew Brown (not his real name) struggled to repay his mortgage but subsequently took his mis-selling case to the Financial Ombudsman Service, and has now won. Despite turning to the FOS late on and being repossessed, he will receive compensation - while other borrowers who begin cases at an earlier stage than he did might well be able to save their homes too.

A housing association tenant, Brown had the valuable promise of a rent fixed for life. However, a mortgage adviser persuaded him to buy the property and failed to consider "what would happen when the attractive discounted rate [set up on that mortgage] ended", according to an FOS spokeswoman.

Brown was repossessed and had to move; he then lodged a complaint with his mortgage adviser and ultimately brought the case to the FOS.

Industry specialists believe more claims of this kind are now likely to emerge. The main source of optimism for those in a similar position lies deep within the FSA's rulebook for mortgage advisers, Mortgage and Home Finance: Conduct of Business (MCOB).

This states mortgage advice must be "suitable for that customer" and that advisers "must make and retain a record" of it being suitable; this is known, crucially (and rather technically), as complying with section 4.7. Breaches of the MCOB rules are "actionable at the suit of a private person who suffers loss as a result", under section 150 of the Financial Services and Markets Act 2000.

"Undoubtedly, such cases would succeed," says professional negligence barrister John Virgo of Guildhall Chambers in Bristol. "There is a fundamental obligation under MCOB [rules] and I'm sure there will be a pretty big increase in this sort of litigation."

Philip Ryley, head of financial services and markets at solicitor Michelmores, is more cautious. He says: "It really depends on each individual case as to whether they have received a service which would breach MCOB rules. It is an issue that may be raised before district judges [deciding repossession cases].

"If it develops wholesale, it devalues the meritous cases that exist. The courts will soon become familiar with these arguments and will then require the borrowers to produce evidence at an early stage. to root out frivolous or unsubstantiated allegations."

Though there may be concern some borrowers might try to exploit the MCOB rule without good cause, there appear to be many cases of people being mis-sold mortgages they could not afford.

A Citizens Advice report entitled Set Up to Fail, on the sub-prime lending market in 2007, found the charity's repossession clients had often found themselves with "inappropriate and unaffordable" mortgages and secured loans, and that people buying council houses received "particularly poor advice".

One case it highlighted concerned a couple with a disabled child in south-east Wales who were persuaded to take a second mortgage on their home. The loan wiped out their equity and meant £1,300 - 87% - of their £1,500 monthly income went on mortgage repayments.

The CML accepts the rulebook can be invoked by consumers. "The MCOB rules are there for a reason: to protect consumers," says spokeswoman Sue Anderson. "Consumers have 'the ability and right' to rely on these regulations if they believe they have not been dealt with correctly," she says.

In 2007, Cash highlighted how cold-callers were using dodgy selling tactics to convince social housing tenants to exercise their "right to buy" and saddle these low-income homes with inappropriate mortgages.

Although the ombudsman found in Brown's favour, the issue remains complicated. The FOS is charged with restoring people, as far as possible, to the situation they would otherwise have been in - and that is not straightforward in circumstances such as these.

"Historically, you may not have been worse off," says the FOS spokeswoman, referring to the fact that when house prices were rising - until 2007 - people who had been mis-sold an unsuitable mortgage might not have lost out if the price of their house was rising. They would not have won compensation.

Now, the ombudsman is having to work out how to compensate someone who has not been protected by the rise in property values.

Have you got a claim for mis-selling?

• If you are in financial difficulty, first try all other steps to resolve your crisis: talk to the lender as early as possible about arrears; seek advice from a debt charity; curb spending and draw up a tight budget; and try to boost your income.

• Be brutally honest: if you've been in any way economical with the truth in your mortgage application, such as overstating your income (whether unwittingly or not), your case will be much weaker.

• You could have a case if your mortgage adviser never explored affordability with you, or dealt with you in a superficial way. Advisers should rely on past figures for income and outgoings, says Philip Ryley of Michelmores. If they don't have them, then you're off to a strong start.

• You might have extra grounds for a case of mis-selling if your mortgage stretched beyond your retirement date and your adviser did not explore that as an affordability issue.

• A case based on what's known as mortgage "misrepresentation" might also be feasible. According to Ryley, this might be arguable if you were "given a very hard sell, or told everything good about the product and given no information about what would happen when interest rates went up". If misrepresentation is argued successfully, the contract can be rescinded - as a case in 1991 proved.

• To avoid the expense of lawyers' fees, a homeowner can make a claim with the individual who advised on the mortgage, and if the response is unsatisfactory take the case to the Financial Ombudsman Service. The FOS would probably request that your repossession proceedings are put on hold during any investigation.

• Even if your mortgage began before the MCOB was ushered in on 31 October 2004, the rules could still apply, says one lawyer who wishes not to be named. "It makes no difference as to when the loan was entered in to, for the purposes of the arrears rules," he says.

• Publicity about such cases will take time to filter out, as they are likely to be settled informally. But if people do start making claims in significant numbers, it could snowball, says one unnamed financial services lawyer. "What would be interesting would be a group action," he said.

Courtesy of The Observer, Sunday 22 March 2009.

MP calls for FSA investment probe

MP John McFall is asking the Financial Services Authority (FSA) to look into claims by Working Lunch viewers that they were missold 'secure' investments.

Mr McFall, Chairman of the House of Commons Treasury Committee, told Working Lunch on Wednesday that he will write to the FSA about a Working Lunch investigation into the selling of 'protected' investments. Some of these schemes turned out to be backed by collapsed US bank Lehman Brothers but were sold as '100% secure'. Viewers have lost hundreds of thousands of pounds as a result.

The selling of these investments by banks and financial advisers was branded 'scandalous' by Mr McFall. 'What I'll do today as a result of this is write to the FSA and bring this to their attention,' he told the programme, adding: 'I think people have been misled and I would like the FSA to look into it urgently.'

Story from BBC

New Rules For Saudi

New Rules For Saudi

No longer can off-plan properties be marketed in Saudi Arabia – new rules introduced in the country which ban the promotion and sale of any developments that are at the planning stage aim to cut down speculation in the property sector and build investor’s confidence…

Developers of residential, office, industrial and commercial property are now banned from placing any adverts or promotional material in any publication if their project is still in the planning stage.

Property exhibitions, both local and international, are also banned as is any other form of multi-media publicity. The developers are not allowed to sell any of the properties off-plan either.

Saudi Arabia is desperate to avoid the boom and bust situation which often occurs as a result of over active speculation in a property market. Dubai is the prime example of this - speculation in the emirate has seen prices fall by as much as half in some areas over recent months.

Dubai had barred off-plan speculations on properties a while back in an attempt to eliminate the boom and bust scenario.

The Saudi authorities are also concerned that international investors have been put off buying property in the country as they thought they may be exploited, so these new rules were introduced as part of a series of measures to protect buyers.

There is also a new committee in place which will be responsible for examining applications for real estate development.

The new property measures will be presided over by the committee, which will include representatives from the ministers of Commerce and Industry, Municipal and Rural Affairs, the Saudi Arabian Monetary Agency and the General Commission for Housing.

The property committee will now have the final say on whether an individual property can be marketed and developers will have to apply to the committee before being able to go ahead with any project.

Courtesy of The Move Channel

Name Change For Timeshare Organisation

Name Change For Timeshare Organisation 25 Mar 09
OTE (Organisation for Timeshare in Europe) announced today that it has changed its name to Resort Development Organisation (RDO). The new name is reflective of developments in the vacation ownership industry, which has changed dramatically since the 1960s when timeshare was first sold, giving the consumer a fixed week at one resort. Since then new forms of vacation ownership have emerged giving the consumer more flexibility and choice, such as floating weeks*, the points system* and, more recently, fractional ownership*, private residence clubs*, destination clubs* and condo hotels*. RDO's chairman, Richard McIntosh said: "I believe that RDO truly reflects the extensive range of holiday options now available in the vacation ownership market. By widening the scope of the organisation's membership, we are representing the industry as a whole rather than just focusing on timeshare. Under RDO, the free complaints resolution service and dispute resolution scheme will be opened up to more people. The level of complaints for timeshare is at a very low level and is decreasing year on year, which compares starkly with other holiday options, such as holiday clubs (or discount travel clubs), which are not governed by specific legislation and do not benefit from trade body representation," concludes McIntosh. RDO will continue to promote best practice and fair trading in all areas of the industry; to work closely with governments, consumer bodies and relevant NGOs to ensure that legislation is appropriate and fair; to protect consumers via its code of conduct and to help the authorities to combat fraud.

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