Losing cash is a dead cert in tipster scam

Kevin Peachey
Personal finance and consumer affairs reporter, BBC News

Hundreds of people lose money each week from tipster scams

It is a sure bet that many more victims will lose thousands of pounds after being tricked by tipster scams, according to experts.

The Office of Fair Trading (OFT) says that £1m is being lost to current bogus tipster mailings in the UK.

Each scam - which last for around five or six weeks - nets the con-artist behind it around £100,000, and an increasing number of affluent horse racing lovers are being caught out.

They are people like Graham Allison, a retired security officer from Thundersley in Essex, who paid £3,000 for a series of tips he was told would make him a millionaire.

"I like a gamble," said the 66-year-old. "But at least I used to lose my own money, rather than somebody losing it for me."

He received a professionally constructed letter explaining that he would be given a series of 100% guaranteed racing tips over the year that would make him a fortune.

But over the next two months, only the first of around nine tips - itself an 8-13 favourite - came in as a winner.

When he tried to enforce his money-back guarantee, he could not reach the "tipster" by telephone and his letters went unanswered.

"I was naive," he says.

"Anyone who receives a letter such as this should never listen to these promises. They are just out to get your money."

Targeting the young

Typically, younger and more affluent people are being targeted in this scam rather than the well-documented bogus lotteries or doorstep rogues.

Mass marketed scams Cost UK consumers £3.5m a year Almost half of the UK adult population has been targeted Victims most commonly aged between 35 and 44 Fewer than 5% of people report scams to the authorities

A self-professed racing pundit claims to have insider information from trainers and owners, but owing to his success on courses has been banned from placing bets himself.

Victims, after handing over their cash, find the tips are poor or non-existent and when they try to act on the money-back guarantee find that the pundit's name is made up and their address just a mailbox.

And the misery does not end for victims. Once targeted, they are inundated with other offers.

Mr Allison says he receives up to a dozen similar letters a week.

They might include requests to place bets on somebody else's behalf or offers to become part of a horse owning syndicate, which proves to be completely false.

In one case, a con-artist claimed to have 30 years of experience in the sport, despite being aged just 29.

Lottery losses

Des Fitzpatrick, a case manager on the OFT's Scambusters team, says victims are being stung for large amounts of money straight away.

This differs from many of the other scams in the UK such as bogus lotteries which draw in victims over time, from a small initial outlay.

Last month, the OFT won a High Court injunction against Brighton-based Wesley Beagley, who they estimated raked in at least £175,000 from tipster services.

The OFT said his mailshots, which suggested winnings of £10,000 a week and used false names, could now no longer be distributed.

But elsewhere the Scambusters team's focus is often on public awareness campaigns.

Research published in December 2006 - the first of its kind - estimated that UK consumers lost about £3.5bn a year to scams.

Some 3.2 million people (6.5% of the UK adult population) fell victim to scams every year, according to the research.

Each had a 30% chance of becoming a repeat victim within a year, as they would often find themselves placed on so-called suckers lists sold between con-artists.

Scams Awareness Month is running throughout February, with people being encouraged to drop any scam mailings in "Scamnesty" bins for OFT research or to report a scam online with Consumer Direct.