TONY HETHERINGTON: Am I being targeted by a rare metal scam within a scam?

Tony Hetherington is the Financial Mail on Sunday’s star investigator, battling readers’ corners, revealing the truth behind closed doors and winning victories for those left penniless. Find out how to contact him below.

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. I have now received a letter from the Chartered Trading Standards Institute in London stating that they are arranging a refund plan. They ask for a fee of £25. Am I being scammed again?

Tony Hetherington replies: The £25 demand is almost certainly just a foot away from the door. Transfer your payment to your bank account and then you will be asked for increasing amounts to cover legal fees, taxes and anything else the scammers can imagine to get more and more money from you.

So yes, it is a scam. The Chartered Trading Standards Institute (CTSI) is a genuine professional organization for people working on trading standards. But the letter you received is fake, despite using the real letterhead and address. Tellingly, the letter uses the CTSI address in central London, but a telephone number – 020 8123 8264 – that suggests the outskirts of London.

That said, someone has gone to quite a bit of trouble. They know you lost £10,000 in the rare earth metals scam and they have your contact details. They advise: “If you have not yet returned your Proof of Creditors Debt form, we urge you to act promptly to allow us to submit your financial claim so that you can receive your capital repayment settlement.”

Fortunately, the criminals have sent him what looks like an official form, showing that CTSI allegedly has £9,234,929 which they have seized following High Court action following the closure of Rare Earth Metal Exchange Ltd.

But again, there is a red flag warning that this is a fraud. The criminals assure him that the money is safe because it is held (all £9m) in a NatWest Isa. Million-pound Isas are rare; in fact, rarer than rare earth metals. 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 never had £9 million in its entire short life. He misled investors by selling metals such as dysprosium and neodymium, which are used in industry, for many times their real value, while claiming that their value would skyrocket. Rare earth metals are not really rare. The title simply means that they are scattered, rather than found en masse in one place.

The fraudulent investment company closed in 2012. At first, the liquidators were slightly optimistic. It seemed as if there really was a reserve of rare earth metals kept in a secure warehouse. But when experts were called in to carry out tests, they discovered that some of the safe stock was actually fake.

The price was a scam, as was the product. The end 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 the NatWest Isa or anywhere else.

I asked CTSI officials what they thought of this. Unfortunately, I was told that this scam using his name has been going on for about two years.

Even more disappointing, when I asked how many people had been arrested and prosecuted so far for impersonating Trading Standards staff, I was told: ‘CTSI is not aware of anyone being 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 after two years no one has been robbed.

The end of this story is that you have now received one last call from the criminals, asking why you had not responded 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 doesn’t say why my direct debits aren’t being paid

JB writes: I asked Scottish Widows how I could make regular contributions to my daughter’s pension policy.

Following their guidelines, I set up monthly direct debits, but then received notifications that the payments had not been successful.

I called Scottish Widows after each notification but was unsuccessful as I ran into privacy laws.

Tony Hetherington replies: In total, Scottish Widows told him four times that attempts to collect direct debits had failed. However, each notification concerned her daughter’s bank account and not her own, where the direct debits should have been collected.

Scottish Widows did not want to discuss this with you because the pension scheme was not theirs, but eventually agreed that they would review the situation if your daughter sent them a request by email. She sent an email but hasn’t heard anything since and her daughter fears her bank will start charging for all rejected direct debits.

I asked Scottish Widows to look into this and it became clear that they should have acted quicker to resolve things as soon as you were first contacted about the failed direct debits. A spokesperson said: “We are sorry for the poor service Mr B and his daughter experienced.”

There’s now a new direct debit, and the first payment is due a few days ago on January 1, so check your bank statement to make sure it went through without a hitch. Scottish Widows has also credited her daughter with £150 to back her apology.

If you believe you are a victim of financial irregularity, 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 volume of inquiries, it is not possible to provide personal responses. Please only send copies of the original documents, which we regret cannot be returned.

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