Tony Levene
As police arrest two directors at the heart of the bankrupt bureau de change Crown Currency Exchange, Guardian Money can reveal that at least 500 other firms are offering foreign exchange transactions with the same light-touch regulation as Crown.
Our investigations have also uncovered links between Crown and another currency business on the internet, called FootballFX.co.uk.
While there is no suggestion that any will disappear with client money, consumers need to be aware that almost anyone can set up a foreign exchange operation with minimal regulation, no requirement to ringfence customers' money, and offering no compensation safety net.
On Tuesday, Devon and Cornwall Police executed search warrants in Cornwall and Glastonbury and arrested two men. One was Peter Benstead, 68, a former director and majority shareholder in Crown; the other was one-time Glastonbury mayor Edward James, 70, also a former Crown director and shareholder. The two men have been interviewed in separate police stations.
Detective Inspector Paul Bean from Devon and Cornwall Serious and Organised Crime Branch said: "It is expected that this will be a protracted inquiry that may take many months. It is anticipated that there are approximately 13,000 victims."
FootballFX was set up in late September. Its website claims it is a "new foreign exchange agency" specialising in offering "the best exchange rate when purchasing holiday money". As well as foreign currencies, its website proclaims links with hotels, ticket agencies, travel and car hire companies – it appears to offer a complete package to football fans and others travelling abroad. It advertises itself on soccer sites. And it promises cash to Help for Heroes – cash that the charity knows nothing about.
But FootballFX's website has no details of ownership or address, and the firm is not listed as a SPI on the FSA website. There are a few clues, however. The two phone numbers on the site are identical to those used by Crown for its Hayle, Cornwall, office. On its FAQ page, it says "Who Supplies our currency? All our currency is purchased through Crown Holdings (London) Ltd. One of the leading suppliers of foreign currency online." This is the same Crown that is now bankrupt.
The website is registered to Peter Rudin-Burgess, whose Linkedin entry shows him as "IT manager at Crown". A bookkeeping services website linked to his wife, Monika Rudin, states: "You may be interested in FootballFX. They provide possibly the best exchange rates for foreign currency available to UK residents." It is not clear whether FootballFX ever took client money or what happened to any cash.
Rudin-Burgess told Money: "FootballFX was one of many 'white label' sites we set up – this one was intended to bring business to Crown from football fans, as Crown had previously supplied cash to travelling Manchester United supporters. It had only been going for a fortnight or so before Crown was shut down. I no longer have any control over the website. It is no longer trading."
A second Cornwall-based currency firm also has close links with Crown and Benstead. TorFX, now located in Penzance, has a majority of its shares owned by trusts connected to the Benstead family.
TorFx is a sizeable firm, with currency turnover last year of more than £500m. But, unlike Crown which was merely registered with the FSA, TorFX is "authorised" by the FSA under the payments services directive. Authorisation is a high level of regulation which involves solvency tests and far closer scrutiny of directors.
While the FSA does not disclose outcomes of supervisory visits, it appears that Tor was given a clean bill of health – otherwise it could have been banned from taking on new business.
...MORE HERE...
No comments:
Post a Comment