Elderly customers promised share of £10,000 fund - but average prize was 91p
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Kingstown Associates Limited led elderly customers to believe they could win a substantial share of a £10,000 prize fund - but only if they bought one of the products it was advertising.
An investigation supported by voluntary Scam Marshals showed more than 11,000 'winners' of the prize draw had received just 91p each.
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Hide AdThe marshals are part of the Friends Against Scams programme, which is run by National Trading Standards (NTS) Scams Team.
This growing network of almost 1,500 marshals support the fight against scams by sharing their own experiences, helping others to report and recognise scams, and sending any scam mail that they receive on to investigators.
The mail they pass on helps to identify the companies running scams and provides the crucial evidence needed to bring prosecutions against them.
Lord Toby Harris, the chairman of National Trading Standards, said: “Kingstown Associates Limited deliberately targeted and misled elderly consumers with scam promotional mailings for financial gain. The company engaged in commercial practices that are banned under the Unfair Trading Regulations and will now, quite rightly, pay the price for their actions."
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Hide AdKingstown Associates was fined £150,000 at York Magistrates' Court in January after being found guilty of tricking recipients into thinking they had won, or could win, substantial cash prizes.
The company, based in Driffield, East Yorkshire, was also ordered to pay a victim surcharge of £170 and prosecution costs of £10,763.84.
Investigators found the company had sent out sent out two promotional mailings - Healthy Living Direct and All the Very Best - which created a false impression that recipients were guaranteed a share of tens of thousands of pounds.
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Hide AdIn order to claim their share of the cash prize, consumers had to first purchase products from Kingstown Associates.
The scam mailings, sent out between January and June 2018, failed to say how much of the cash prize would be paid to the recipient and how many consumers, on average, would claim from the fund.
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Investigators with the National Trading Standards Yorkshire and the Humber Regional Investigations Team found that there were 11,016 'winners' of the £10,000 cash prize promoted through Healthy Living Direct, with each person receiving just 91p.
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Hide AdThe company was found guilty on January 15 of ‘banned practices’ under the Consumer Protection from Unfair Trading Regulations 2008.
Lord Toby added: "Cases of postal scams are widespread but notoriously difficult to measure given low reporting rates. Anyone who suspects that they or someone they know is receiving scam mail should report it to the Citizens Advice Consumer Helpline by calling 03454 04 05 06.
"We’d also urge people to join our Friends Against Scams initiative to help empower people to identify scams and prevent neighbours, family and friends from falling victim to mail scams.”