UK victims of an international mass-marketing scam will be compensated following a landmark investigation by the National Trading Standards (NTS) Scams Team.
An estimated seven million UK addresses were targeted by US-based fraudsters offering alleged cash wins and ‘guaranteed’ cash prize pay-outs. The criminals deliberately preyed on consumer vulnerability, particularly older people living alone or those with long-term health conditions. The mailings enticed victims by asking for an upfront fee ranging from £25 to £40. Many paid the fee several times before realising there was no prize, with the highest individual losses in the UK running into thousands of pounds.
After working alongside the US Federal Trade Commission, the NTS Scams Team has been able to secure a total of more than £530,000 in compensation to more than 3,500 victims, marking a new approach to obtaining proceeds of crime from international fraudsters.
Louise Baxter, Head of the NTS Scams Team, said: “Today marks a major milestone in an investigation that started four years ago. Falling victim to a scam can have a huge emotional impact on individuals so I’m delighted that we can use the proceeds of these crimes to provide compensation to thousands of UK victims, with the help of our network of Trading Standards Officers.
“Collaborating across borders with the Federal Trade Commission has proven highly effective. We are confident that this approach of obtaining proceeds of crimes from international fraudsters to compensate UK victims could be replicated in the future.”
The NTS investigation identified a criminal enterprise based in Kansas as the source of the mailings. The criminals – Kevin Brandes, William Graham, Charles Floyd Anderson and their companies – had sent tens of millions of deceptive personalised mailers to individuals around the world, in the so-called ‘Next Gen’ sweepstakes scheme. They ran a classic and vintage car sales operation and held millions of dollars in a variety of bank accounts.
Working with US colleagues at the Federal Trade Commission, action was taken against the perpetrators in 2018, which saw them agree to forfeit $30m in cash and assets, of which $25m was made available to compensate victims around the world. NTS, which was commended by the US Attorney General for its role in the investigation, has since worked to secure the first compensation scheme across international borders in the UK. Victims will be issued with a pre-loaded card which they can spend in shops or pay into their bank accounts. The cards will be distributed through local Trading Standards offices.
Lord Michael Bichard, Chair, NTS, said: “Mass-marketing mail fraud represents a persistent threat to UK consumers, and particularly to vulnerable and elderly people. This investigation and approach to obtaining the proceeds of crime sends a clear message that fraudsters, wherever they are based, can be caught. It is testament to the work of the National Trading Standards Scams Team, working alongside local trading standards officers, that money will be returned to so many victims.”
Samuel Levine, Director of the Federal Trade Commission’s Bureau of Consumer Protection, said: “The FTC appreciates the support provided in this case by the National Trading Standards Scams Team and our other international partners. Their assistance contributed to the success of the FTC’s case and helped ensure that victims worldwide benefit from this refund program.”