These scammers promise to help cut your Council Tax bill, but they'll leave you out of pocket.
Council Tax demands hit properties this month. The vast majority are the same, or fractionally different, from 2013-14. But the bills remain daunting, especially for those living on a fixed income. And it is not helped by the huge discrepancies. The owner of a seven bedroom mansion in Mayfair can pay less than the resident of a three bedroom semi in Nottinghamshire.
Council Tax in England (it's slightly different elsewhere in the UK) is based on eight price bands, which come not from the current value but what it was worth in 1991. You can appeal against a banding - it costs nothing - but the grounds are limited. Your best chance is if the property has fallen in value because it has been partly demolished or it has been substantially adapted for someone with disabilities.
But that does not stop scam 'Council Tax reduction' businesses. I recently received an automated phone message urging me to cut my Council Tax simply by following a “few simple steps”.
One was to send a “refundable” £199 for an “assessment” to determine if I could make an appeal. If I had no grounds, I would not pay. But if I was overpaying, I could apparently claim all the way back to 1991 or when I moved in, if later. The firm would then take 20% of my refund.
Not as good as it sounds
How could I lose? Inevitably it does not work like that. The fact is that anyone can make an appeal, but as the grounds are so limited, almost all will be rejected. I would of course lose my £199 - my scam company only promised that it would investigate if I could make that appeal.
This is reminiscent of automated PPI messages with their “no win, no fee” £499 upfront, which they claim is the key to a refund of everything ever paid on a credit card. Anyone can complain to their bank. But equally, the bank can reject all these appeals as the nonsense they are.
Going back further, there was a thriving scam in 'European Union grant applications'. Dishonest firms targeted small businesses saying they could help them apply for EU cash in return for £399 – again “refundable”. I could have applied for a farming or fishing grant even though I do neither activity. I would have simply received an automated rejection letter.
A Lancastrian scam?
Oddly, the majority of these scams are based in Manchester and the surrounding Lancashire area. Some have been sending out people door to door to convince vulnerable residents, often asking for bank details as well. Some claim there have been “Council Tax rule changes”. That is true but, if anything, they make it even more difficult to avoid the charge.
Earlier this month, Lancashire-based Dalton & Dalton Tax Consultants Ltd was wound up in the public interest by the Insolvency Service. The company “misrepresented its ability to obtain Council Tax rebates for customers”, making unsolicited calls to arrange appointments for its sales agents to visit prospective customers at home. The court heard the representatives invariably told prospective customers that “they were likely to be successful with an application for Council Tax re-banding and hence a rebate of Council Tax paid in previous years”.
The doorstep seller or the cold caller persuaded the resident to sign an agreement with £165 upfront to “instruct Dalton & Dalton Tax Consultants”. In the event that the company achieved a Council Tax rebate for a customer, it would retain a 25% ‘success fee’ of the refund.
It was a lucrative business. The firm banked £1,085,946, with just £17,688 apparently coming from success fees. That represented just 27 of the 2,750 concluded Council Tax banding challenges made by the company. Other customers had handed over their money, without even seeing an appeal.
[SPOTLIGHT]Dalton & Dalton had no skills other than persuasion – anyone can call themselves “tax consultants”.
The website is no more but it did say: “We are an industry leading, highly qualified, and professional consultancy, providing solutions on an individual basis to private clients and businesses.”
And on social media it claimed: “We offer a free Assessments service which will discover which band your property should be in. Only with your acceptance will we proceed to challenge your Council Tax banding, and then we will go ahead only if we believe we can get your bill lowered."
It was all rubbish but many hard up Council Tax-payers want to believe these lies. And while Dalton & Dalton is no more, there are others filling that vacuum.
A man working out of the Bury location has been arrested but not yet charged following a police and trading standards operation following a number of complaints of fraud by false representation made against the company which related to obtaining Council Tax refunds.
More on scams:
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The banking scam that targets the rich
Don't be enticed into this 'banned' investment!