Mail scammers found guilty of tricking elderly consumers

A company that sent out scam promotional mailings to elderly consumers has been fined £150,000 at York Magistrates’ Court today (21 January 2020) after being found guilty of tricking recipients into thinking they had won, or could win, substantial cash prizes. The company has also been ordered to pay a victim surcharge of £170 and prosecution costs of £10,763.84.

Between January and June 2018, Kingstown Associates Limited, based in Driffield, East Yorkshire, sent out two promotional mailings - ‘Healthy Living Direct’ and ‘All the Very Best’ - which created a false impression that recipients were guaranteed a share of tens of thousands of pounds. However, in order to claim the cash prize, consumers had to first purchase products from Kingstown Associates. Having made a purchase they discovered the cash prize had very little (if any) value.

The scam mailings failed to say how much of the cash prize would be paid to the recipient and how many consumers, on average, would claim from the fund. The investigation by the National Trading Standards Yorkshire & the Humber Regional Investigations Team found that there were 11,016 “winners” of the ‘Healthy Living Direct’ £10,000 cash prize with each person receiving £0.91 (the total amount awarded being £10,024.56).

On 15 January 2020, the company was found guilty of ‘banned practices’ under the Consumer Protection from Unfair Trading Regulations 2008. This included creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either:

• there is no prize or other equivalent benefit, or
• taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost

Lord Toby Harris, Chair, National Trading Standards, said:

“Kingstown Associates Limited deliberately targeted and misled elderly consumers with scam promotional mailings for financial gain. The company engaged in commercial practices that are banned under the Unfair Trading Regulations and will now, quite rightly, pay the price for their actions.

“Cases of postal scams are widespread but notoriously difficult to measure given low reporting rates. Anyone who suspects that they or someone they know is receiving scam mail should report it to the Citizens Advice Consumer Helpline by calling 03454 04 05 06. We’d also urge people to join our Friends Against Scamsinitiative to help empower people to identify scams and prevent neighbours, family and friends from falling victim to mail scams.”

Cllr Andrew Waller, Executive Member for Economy and Strategic Planning at City of York Council, said: “I applaud our investigators for unveiling and successfully prosecuting a mail scam that preyed upon vulnerable members of the community for financial gain.

“As this prosecution shows, when companies deliberately give misleading or false information, we will investigate and bring them to justice.

“We encourage residents to keep an eye out for vulnerable neighbours and if you think someone you know is being targeted, contact Citizens Advice consumer helpline on 03454 04 05 06.”

The company had previously been investigated by the Advertising Standards Authority (ASA), who banned the company’s misleading promotional mailings. However, the company failed to make sufficient improvements to its commercial practices.

ASA Director of Complaints and Investigations, Miles Lockwood said:

“We welcome the sentencing handed down to Kingstown Associates Ltd for its scam promotional mailings following our work with and investigation by National Trading Standards Yorkshire & the Humber Regional Investigations Team. Its direct mailings gave the impression that recipients would definitely receive an award when that was not the case and were in fact subject to various significant conditions that treated consumers unfairly and were misleading.”

Scams often target people made vulnerable because of their situations or circumstances, which means the harm is often emotional as well as financial. More than half of over 65s (53%) have been targeted by scams, but only 5% of scams are actually reported.

In addition to taking action against criminal activity, National Trading Standards also works to equip consumers with awareness and advice to identify and avoid postal scams. The Friends Against Scams initiative aims to protect and prevent people from becoming victims of scams by empowering people to take a stand against scams through local training sessions and eLearning modules. For more information visit friendsagainstscams.org.uk.