In the third of our features highlighting fraud in the travel industry, two agents recount how they became victims of coproate identity fraud when they tried to sell their businesses.
Both have requested that their identities remain secret.
Case study one
We had advertised our business for sale through a specialist agency. It seemed like the right time to sell up and move on to new things.
The agency had made some referrals that had not come to anything and were in the process of vetting another potential buyer. Monday came again and we still had not heard from the agency.
Later that morning we received a call from one of the would-be buyers. He asked if we could meet as the agency had been taking a long time to do its checks and he was keen to get things moving.
We met and the buyers seemed keen. They said they wanted to get into the UK market as they owned hotels in Greece and wanted to sell them through their own UK agency.
We agreed to go through with the sale straight away. A current director would remain for 12 months, at which time the buyers would take total control. We agreed a deposit with the balance to follow.
At this point a bag of cash was put on the table – the deposit of nearly £20,000. We were shocked at this and declined the cash. We said that this should be paid by draft through our solicitors and this was done within a couple of days.
The buyers contacted us later to say they had set up a call centre for when they took the business over. To ensure they were happy with how things were run, they asked if they could take out some advertising. They would take calls and then pass client details to us to charge their cards and issue documents.
This went well for a while until we began to receive complaints from customers who had paid but had found that they had not been booked. The buyers assured us that this was just a teething problem.
We began to receive more calls from customers with problems; we had never received so many complaints. We were receiving hollow promises from the buyers who constantly said they would ensure these matters were resolved. Eventually we decided to remove the advertising, at which point things became a lot worse.
Our bonding organisation confirmed it knew of one of the buyers and advised us to put a stop to things immediately otherwise the situation could become a lot worse.
The complaints became more frequent after this and we also found that in many of the cases the buyers had debited customer accounts through a company they had set up themselves.
We have had to refund tens of thousands of pounds to customers who had contracts with us. It was not us that took their money but we have been left seriously in debt by these fraudsters. In hindsight a lot of things did not seem right throughout this sorry affair, but we were keen to sell and dismissed them. If only we had questioned those little things.
Case study two
The business was advertised for sale and two men who were showing interest made contact.
They advised us that they already owned a tour operation but wanted a travel agency so they could sell the products of the operator through their own agency.
They agreed the full asking price almost immediately and agreed this to be paid in three monthly instalments, but they wanted to take over the business within 14 days. All of this seemed a little odd but the full asking price within three months was a very good deal.
The solicitors informed us that the purchase would not be in the names of the men that we met, but in a lady’s name, who we had never met.
However, the contract was drawn up and signed. The first instalment arrived eventually, we then received a few cheques that bounced, but eventually the payment came through, albeit late.
The two men we first met visited us every week checking the money coming in, which they seemed very pleased with. They had previously advised us that they did not need a solicitor and they undertook no due diligence, which we found odd considering the money they were putting in.
One day we met with the two men as usual and were surprised when they asked us to draw up a new contract with them for less than the original sale price, but we could keep what had already been paid, so we would in fact still receive full asking price.
They also asked us to open company credit card accounts for both of them and arrange contract hire on two expensive cars.
All of this was very odd, so we contacted the lady we had entered the contract with. She admitted that the two men were using false identities and if we stopped dealing with them she would pay the remainder directly and take over the company.
This she did, but not before we were paid a visit by some heavies who threatened that things would happen to us if we sold to the lady. Fortunately we got our money for the sale and got out while we could.
However, that was not the end of the story. The lady managed to get out of the business but has been pursuing us for the past two years as she says that we misled her into buying the business and she was issuing proceedings against us. Will this ever end?