TONY HETHERINGTON: Am I the target of a rare metals scam within a scam?

Tony Hetherington is the Financial Mail on Sunday’s top researcher, taking on readers’ corners, uncovering the truth that lies behind closed doors and delivering victories for those left out of pocket. Below you can read how you can contact him.

JM writes: A few years ago I was scammed by a company called Rare Earth Metal Exchange Ltd, who sold me metals that turned out not to exist. Now I have received a letter from the Chartered Trading Standards Institute in London claiming that they have a refund scheme. They charge a fee of €25. Am I being scammed again?

Tony Hetherington replies: The £25 demand is almost certainly just a foot in the door. Transfer your payment to their bank account and you will then be asked for increasingly higher amounts to cover legal fees, taxes and anything else the scammers can think of to squeeze more and more money out of you.

So yes, it is a scam. The Chartered Trading Standards Institute (CTSI) is a truly professional organization for those concerned with trading standards. But the letter you received is fake even though you use the real letterhead and address. The advantage is that the letter uses the CTSI’s central London address, but a telephone number – 020 8123 8264 – that suggests it is outside London.

That said, someone put in quite a bit of effort. They know you lost £10,000 in the rare earths scam, and they have your contact details. They advise: ‘If you have not yet returned your Certificate of Creditor’s Debt, we urge you to take action so that we can submit your financial claim so that you can receive the settlement of your capital.’

Fortunately, the crooks have sent you a form that looks like an official one, showing that the CTSI is allegedly in possession of £9,234,929, which was seized in the aftermath of a High Court case following the closure of Rare Earth Metal Exchange Ltd.

But again, there is a red flag warning that it is fraud. The crooks assure you the money is safe because it – all £9 million of it – is kept in a NatWest Isa! £1million Isas are rare – even rarer than rare earths. But discovering an Isa worth £9 million would be like finding a unicorn with Elvis Presley on its back.

Not only that, but Rare Earth Metal Exchange Ltd has never owned £9 million in its entire short existence. It deceived investors by selling metals such as dysprosium and neodymium, used in the industry, for many times their actual value, while claiming they would increase in value. Rare earth metals are not really rare. The title just means that they are spread out, rather than found in bulk in one place.

The scam investment company was shut down in 2012. Initially, the curators were somewhat optimistic. It looked like there really was a cache of rare earth metals in a secure warehouse. But when they brought in experts to run tests, they discovered that some of the protected stock was actually counterfeit.

The price was a rip-off, and so was the product. The final result was that the assets owned by Rare Earth Metal Exchange Ltd were worth just over £100,000, while creditors’ claims amounted to £3.6 million. So no £9m in a NatWest Isa or anywhere else.

I asked CTSI officials what they thought about this. Disappointingly, they told me that this scam using their name has been going on for about two years.

Even more disappointingly, when I asked how many people had been arrested and prosecuted so far for posing as Trading Standards staff, they told me: ‘CTSI is not aware of anyone having been charged or prosecuted for this.’ They added: ‘We are very frustrated that scammers continue to use the organization’s name for nefarious purposes.’

Personally, I find it even more frustrating that no one has been picked after two years.

The end of this story is that you have now received a final phone call from the crooks, asking why you did not respond to their letter.

When you told them you had contacted me and The Mail on Sunday, the phone went dead. If only all scams could be stopped so easily.

Scottish Widows will not say why my direct debits remain unpaid

JB writes: I asked Scottish Widows how I could regularly contribute to my daughter’s pension policy.

Following their guidelines, I set up monthly direct debits, but then received notifications that the payments had failed.

I called Scottish Widows after each report but was unable to do so due to privacy laws.

Tony Hetherington replies: In total, Scottish Widows has told you four times that attempts to collect direct debits have failed. However, each notification referred to your daughter’s bank account, and not to your own account from which the direct debit should have been collected.

Scottish Widows did not wish to discuss this with you as the pension scheme was not yours, but eventually agreed that they would review the situation if your daughter sent a request by email. She emailed, but you haven’t heard anything since and your daughter is afraid that her bank will charge for all rejected direct debits.

I asked Scottish Widows to look into this and it became clear that things should have been resolved more quickly once you first made contact about the failed direct debits. A spokesperson said: ‘We are sorry for the poor service experienced by Mr B and his daughter.’

A new direct debit is now in effect, with the first payment due a few days ago on January 1st. So check your bank statement to make sure it went through without a hitch. Scottish Widows has also credited your daughter with £150 to support her apology.

If you believe you have been a victim of financial misconduct, please write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Due to the large number of questions, personal answers cannot be given. Please only send copies of original documents, which unfortunately cannot be returned.