War on the PPI sharks: Warning to rogue firms as pair who sent spam texts are fined 440,000Chris Niebel and Gary McNeish created a database of PPI claimants who responded to the 840,000 spam texts they sent per day
The pair have been fined a total of 440,000
23:55 GMT, 28 November 2012
Rogue firms which cash in by bombarding millions with nuisance texts and calls face a crackdown.
The claims companies face prosecution and hefty fines for using personal information gathered illegally to target the public.
Many of the unsolicited texts or recorded messages boast that recipients could be entitled to compensation from the mis-selling of Payment Protection Insurance (PPI) by banks.
Nuisance texts: Gary McNeish, left, and Chris Niebel, right, sent 840,000 spam texts a day from their company for which they have been fined 440,000
Others promote the idea of collecting big money through making a personal injury claim.
The calls are received every day by many phone users and have become a major source of complaints to telecoms watchdogs.
But yesterday a clear message was given to the industry when two men responsible for a scam which generated massive profits from sending out 840,000 spam texts a day were fined a total of 440,000 by the Information Commissioner’s Office (ICO).
Chris Niebel and Gary McNeish of Tetrus Telecoms created a database of names, addresses and contact details of people who responded to the texts.
At one stage, their company was making 8,000 a day by selling on these leads to claims management firms offering to pursue PPI refunds and personal injury cases.
Last night these claims companies were warned they also face prosecution and fines of up to 500,000 under the Data Protection Act for cashing in on any information that was gathered illegally.
Among the firms which bought details from Tetrus was the Accident Advice Helpline (AAH), which is promoted in TV commercials by consumer champion Esther Rantzen.
Annoying: Many have grown tired of spam texts promising payment protection insurance refunds
AAH insists that it did not know the
details were gathered illegally and that it helped the UK authorities
track down the men responsible.
Middlemen have become a menace by sending out millions of mobile phone texts and automated calls to mobiles and landlines.
sell leads to firms which make tens of millions of pounds a year in
fees that can amount to as much as 25 per cent of the value of any
insist they are helping ordinary people who have suffered an injury or
been ripped off by a bank, but critics say they are lining their own
pockets, because victims of mis-selling can make their own claim by
simply calling their bank.
fines by the ICO are the first issued by the Government watchdog over
spam texts, while it is currently investigating three other companies.
Commissioner Christopher Graham said: ‘The public have told us that
they are distressed and annoyed by the constant bombardment of illegal
texts and calls and we are currently cracking down on the companies
responsible, using the full force of the law.
‘The two individuals we have served penalties on today made a substantial profit from the sale of personal information.
knew they were breaking the law and the trail of evidence uncovered by
my office highlights the scale of their operations.’
He made clear that the two represent just the tip of the iceberg and he will now go after claims firms that bought the information.
‘We are working with the Ministry of Justice to target claims management companies who purchase this information breaching the industry regulations, the Data Protection Act, as well as electronic marketing regulations,’ he said.
AAH admitted that it bought illegally obtained leads from Tetrus via an intermediary company in 2011.
A spokesman said it stopped using text message-based leads immediately after it found out and then helped the UK authorities to track down the men behind Tetrus.
The company is run by Darren Werth, who is chairman of the Claims Standards Council, which is campaigning to stop spam text messages.
A spokesman for the council said: ‘We welcome the fact that these guys have been caught. We are part of the effort to put a stop to this by passing as much intelligence as we can to the authorities.
‘Good companies try desperately to ensure there is a good clean system for gathering data to make legitimate claims.’
Esther Rantzen welcomed the ICO’s action, saying: ‘I have complete faith in AAH as a thoroughly honest and caring company working on the side of the consumer, otherwise I would never have agreed to work with them.’
Citizens Advice chief executive Gillian Guy said: ‘It’s good to see the Information Commissioner throwing the book at the text pests who are plaguing our mobile phones, and we want to see more fines like this.
‘We’re urging people to go direct to their bank to make a claim for mis-sold PPI.
‘That way they keep all their compensation.’
Last month a cold call firm was forced to pay compensation to a businessman after he took it to court for wasting his time. Richard Herman, 53, invoiced it 10 for every minute he spent answering its calls.
The British playboy living in Thailand who's made a fortune out of cold calling
/11/28/article-0-16414F2C000005DC-677_634x445.jpg” width=”634″ height=”445″ alt=”The good life: Gary McNeish, seen with two female friends relaxing in a Thai bar, faces being pursued for a 300,000 fine” class=”blkBorder” />
The good life: Gary McNeish, seen with two female friends relaxing in a Thai bar, faces being pursued for a 300,000 fine
Three years ago, the pair from Manchester set up Tetrus Telecoms, a firm which developed systems that automatically sent text messages to millions whose numbers were often dialled at random in breach of privacy regulations.
Usually, the texts said that the sender had evidence that the recipient was owed compensation from an accident or a mis-sold PPI policy. Recipients were invited to text back ‘CLAIM’ if they wanted to know more, or to send the message ‘STOP’ if they did not want to receive any more texts.
But this was an outrageous con. Most of the numbers were generated by a computer. So people who texted back simply informed the duo that they had made contact with an operating phone number.
This is valuable information, because such ‘live’ numbers are the lifeblood of companies that make their money through cold-calling. Having conned people into revealing their phone numbers were active, McNeish and Niebel sold the numbers in their thousands for up to 5 a time to call centres and claims management companies.
There are around 3,000 claims management companies in England and Wales which buy lists of active numbers from the likes of McNeish and Niebel, then use them to cold-call people to try to persuade them to make a PPI claim in return for up to 25 per cent of any compensation won, typically around 3,000. In doing so, they prey on the ignorance of people who do not realise they could make their own claim by simply calling their bank.
Given that the high street banks have accepted responsibility for the mis-selling of 10billion worth of payment protection insurance, there are vast amounts of money to be made.
At the unscrupulous end of the market, the aim is to persuade individuals to make a PPI claim even if they have no recollection of ever having taken out a policy. According to the Building Societies Association, the number of such unfounded claims for compensation went up by 247 per cent last year, a figure that equates to 22,241 people being misled into thinking they had a valid claim.
As a result, the banks and building societies are dedicating tens of thousands of staff to dealing with the unfounded claims generated by spammers like McNeish and Niebel. And while we should not feel sorry for the institutions that sparked this mess, the costs of processing claims will ultimately be passed on to the banks’ customers.
Inevitably, the PPI feeding frenzy has attracted more than its fair share of sharks intent upon harvesting your information and selling it on. Now, two of them at least are being made to pay.
Money-maker: These companies bombard people with texts and those who reply they then try to extract personal information that can help them make huge profits
McNeish, who lives in Chon Buri, about 50 miles south-east of Bangkok, set up Tetrus in 2009, citing its headquarters as Suite 72 of the Cariocca Business Park in Manchester. Reception staff at the business park, however, said the suite had never been anything more than a mail delivery address.
McNeish was the only registered director, though Niebel has described himself to potential clients as ‘managing director’ or ‘owner’.
After receiving thousands of complaints about these and similar spam texts, the Information Commissioner’s Office (ICO) began a nine-month investigation.
Under new regulations which came into force earlier this year, salesmen or women may not cold-call or text individuals without their express consent. Call centres try to get round this by claiming their targets have ‘opted in’ to their information being passed around. But such ‘consent’ is often flimsy; it may derive from something as simple as an individual having entered an online competition where they failed to tick a box saying they did not want their details given to third parties. An illustration of how spam texts can be deeply upsetting comes from Linda Aitchison, the 44-year-old widow of former BBC journalist Neil Aitchison, who died last May from cancer. He was also 44.
‘Towards the end he was increasingly confused,’ said Linda. ‘He kept getting these text messages telling him he was entitled to compensation for PPI, and for help with loans and credit card bills, but he’d never had a credit card or a loan in his life.
‘This worried him. He kept asking me whether there was something he could be doing about this. I think in his confusion he was worried that he was leaving us with debts.’
It is impossible to say who sent the texts but after Neil died, call centres, presumably having bought his number, began phoning Linda’s home several times a day and asking for her husband.
Linda said: ‘My teenage daughters slam the phone down, but it often reduces me to tears.’
When I confronted Chris Niebel in Manchester, where he lives in a small terraced house with his partner and baby daughter, he insisted he was innocent.
‘I don’t believe we did anything wrong,’ he said. ‘We were using opt-in lists, where people had agreed to be contacted. And there certainly weren’t millions of texts. I believe they have only had 17 complaints linked to us. [In fact, more than 400 complaints linked to Tetrus were received by the Commissioner’s office.]
‘There were around 300 companies doing the same thing as us at the time, so the Information Commissioner’s Office have put two and two together and come up with five. A lot of these companies used the same messages [about PPI compensation] as us – they weren’t all sent by us.
‘People think we’ve made a lot of money out of this, but we haven’t. Neither of us has any assets.’
This despite the ICO report saying that he and McNeish made ‘hundreds of thousands of pounds in profit’ over three years.
The ICO had given the pair until last weekend to come up with proof that the people they sent messages to had all consented to being contacted. But they failed to provide convincing evidence and will now be pursued through the courts until they pay or are forced into bankruptcy.
At his home in Fallowfield, Manchester, McNeish’s father, also called Gary, said: ‘I don’t believe my son has done anything wrong. He moved to Thailand three years ago and has no plans to come back. He tells me that he and Chris were buying lists of people who had opted in to receive information like this.
‘As far as I know, Gary is still doing this, but from a different part of the world.’
Friends of McNeish say he is obsessed with making money. An early Facebook site used by him, and later abandoned, features profile pictures of a Rolls-Royce, a fistful of dollars, a mansion with a swimming pool and a logo that reads ‘Wealth For Life’.
When approached by the Mail, he failed to respond to phone calls and emails to his home in Thailand.