Complainant: OFT own-initiative investigation
Case reference: CRE-E/25219
Investigation against: The identity of the trader has not been
disclosed so as not to prejudice any future action that may be taken by
an agency in another European Member State.
Issue: The OFT formed the view a trader was offering bogus
Relevant instruments: Enterprise Act 2002, Consumer Protection
from Unfair Trading Regulations 2008 and the Electronic Commerce (EC
Directive) Regulations 2002.
The investigation was opened following the receipt of a referral from
the Trading Standards Service about a trader claiming to be based in
their area allegedly selling bogus investment opportunities via its
website. Information about the trader and consumer complaints relating
to the bogus investments were forwarded to OFT by the Trading Standards
Evidence available to the OFT indicates that UK consumers who invested
money in the trader's investment plans subsequently received no return
on their investments despite the trader 'guaranteeing' a return. Also,
consumers were unable to contact the trader using the details provided
on its website which included a false UK address.
The OFT formed the view that the trader had breached consumer protection
legislation that would be likely to harm the collective interest of
Engaging in misleading actions in accordance with Regulation 5 of the
Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
Regulation 5 states that a commercial practice is a misleading action
if it involves a false or deceptive practice in relation to a specific
list of key matters (which include the benefits of the product, the
risks of the product and the geographical or commercial origin of the
Failing to provide a geographic address at which the trader is
established, and an electronic mail address, which make it possible to
contact the trader rapidly and communicate with it in a direct and
effective manner, in accordance with Regulation 6(1)(b) and 6(1)(c) of
the Electronic Commerce (EC Directive) Regulations 2002.
Following concerns expressed by the OFT to the ISP hosting this
trader's website, the website was suspended.
During its investigation the OFT identified a second website, which it
thought was also offering bogus investment opportunities, which also
appeared to be operated by this trader. Evidence available to the OFT
indicates that funds flowing from this activity were being sent by the
trader's payment service provider to individuals in another European
Member State. As a result, the OFT has now referred this matter to the
relevant agency in this European Member State using the EU Consumer
Protection Cooperation Network, an EU network made up of public
authorities from all Member States (and EEA countries) which are
responsible for enforcing consumer legislation. The OFT has now closed
its investigation into this matter.
Published 1 September 2010