Mrs E.H.L. writes: We paid £10,195 to Incentive Leisure Group for holiday club membership, but it went into liquidation. Last December we were contacted by Blue Flag Solutions, which said it could reclaim our money and we paid a fee of £481 using an MBNA credit card.
However, the Financial Ombudsman Service rejected our claim, so we asked Blue Flag Solutions to repay our £481.
It refused and MBNA also declined to repay us because it said the money actually went to a different company and not to Blue Flag Solutions.
Incentive Leisure Group did not just go into liquidation. It was forced there by the Office of Fair Trading, which took the company to court for operating a scam in which people paid thousands of pounds up front on the hollow promise of cheap holidays for years to come.
But there was no pot of gold left to repay victims, so the promises from Blue Flag Solutions were just as empty. It was a fresh fraud built on the wreckage of the original scam.
Blue Flag Solutions claims to offer advice on consumers’ rights. It calls itself a limited company and uses addresses in Preston and Manchester. Its contracts say that the laws of England and Wales apply. But it is a fraud.
There is a genuine company called Blue Flag Solutions Limited, but it is a cleaning business in Northampton. When I told him about his company’s evil twin, owner Graham Keech was startled. ‘Oh, that’s not supposed to happen, is it!’ he said. He has no connection to timeshare or holiday clubs, he explained, and knew nothing about the firm misusing his business’s name just a couple of hours’ drive up the M6.
So what is at the addresses in Preston and Manchester? Well, they are both office buildings offering short-term lets, or you can have mail and telephone calls handled there while you hide hundreds of miles away.
And this turned out to be the key to your problem with MBNA. You complained that Blue Flag Solutions had cheated you. Under the Consumer Credit Act, your card company should have repaid you. But MBNA replied that it had no links with Blue Flag Solutions. It had paid a company called Day International Marketing, which you knew nothing about.
This should have made things easier. MBNA should have repaid you simply because you never authorised any payment to Day International Marketing. I am glad to report that MBNA has reviewed your claim and repaid you in full. The £481 should appear on your latest card statement as a credit.
But there is more to report. Day International Marketing turned out to be based in the Canary Islands, an area notorious for timeshare crooks. On July 22, officers from the Organised Crime Unit of the Spanish police raided Day International Marketing’s base in the Club Puerto Atlantico leisure complex. They arrested more than 70 people linked to the company and to connected firms including Timeshare Refund Network and Reclaimgc.