Officers at the Serious Organised Crime Agency (Soca) have shut down a scam letter scheme that could have gained organisers around £35 million each year.

The police raided a Summerset address that was used in the scam which had already made nearly five hundred thousand pounds.

Cheques recovered are currently being distributed back to around 22,000 senders along with letters informing them they have been scammed and warning them to be more careful in the future.

The letters responded to an international lottery scams and fake offers, and were intercepted by the police during a Summerset raid in June before reaching their final destination overseas.

They usually contained £20 each in cash, which leads Soca to believe that this scam could have made the fraudsters over £35  million each year in profits.

‘Be on Your Guard’

Soca’s director of enforcement Trevor Pearce has said: “mass market frauds are often sophisticated and convincing – criminals know just which buttons to press to make people part with money, especially in an economic downturn when we are more susceptible to believing good news.

“In this case, we’ve been able to return people’s money, and although the perpetrators are abroad and outside out jurisdiction, a substantial blow has been dealt to their operation by cutting off this particular channel.

“The most powerful way to defeat the fraudsters though is to ignore them. Quite simply, be on your guard. Don’t be a willing victim for their crime – if something seems too good to be true, it probably is.”

He also added that people who fall for one scam may find their names on a list that gets sold on to other fraudsters and can end up losing their life’s savings in the long run.

Jacqui Smith, the Home Secretary, has congratulated Soca on their success, adding that it has sent a “strong message” to the criminal network that people are working to stop them victimising innocent people.

She also said: “we will continue to invest in agencies like Soca to enable them to tackle these criminals effectively. The public can be very confident that we are doing everything in our power to make it as difficult as possible for those groups to continue to operate.”

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As was expected after the number of cuts in recent months, the Bank of England has today decided to keep bank interest rates at 0.5%.

The Bank has decided not to cut interest rates this month after six previous cuts since October last year which have, in total reduced interest rates from 5% to 0.5%.

The Bank has also decided to continue with quantitative easing in order to create money to boost lending and ease the economy out of recession. It has currently injected nearly £26.5 billion into the system.

On top of this, the Bank’s Monetary Policy Committee voted to continue “the programme, announced on 5th March, of asset purchases totalling £75 billion financed by the issuance of central bank reserves”.

However, as rates are already so low, the Bank are having to look at other policies in order to boost the economy – the reason it introduced quantitative easing in the first place, to buy assets like government and corporate bonds and increase the amount of money in the economy so that banks find it easier to start lending again.

The deputy director general of the CBI said: “It is too early to judge quite how quickly this will begin to affect the broader economy.”

Savers to Suffer Further

“But the first tentative signs of the impact on gilt yields, corporate spreads and commercial paper issue have been encouraging.”

Michael Coogan of the Council for Mortgage Lenders has also said: “There are a number of institutions who are going to make significant commitments to lend money both to businesses and for home ownership.

“But what we have also got is a market where there is a large number of lenders who are not as active, such as building societies and specialist lenders.”

Low rates are good news for mortgage holders, but they are probably less welcomed by savers who’s interest on their accounts has been dramatically slashed.

Adrian Coles of the Building Societies Association has said: “Whilst savers will be pleased that rates have not been cut any further, this will do nothing to help those who have seen the income they earn on their savings diminish sharply in recent months.

“Leaving Bank Rate on hold allows the impact on the wider economy of the recent rate cuts and the decision to start quantitative easing to be assessed. It will take some time before the effectiveness of these policies become more clear.”

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Nearly a million people are still waiting for their claims to return their bank overdraft charges have been frozen since July 2007.

Figures obtained from the Financial Services Authority showed that around 973,000 complaints are still on hold, nearly 27,000 of these stayed in UK courts.

The information has been obtained through a consumer campaign group called Legal Beagles. Nick Spooner from the group said: “I am surprised – it’s huge. It’s far more than I thought.”

The number of claims being made reached a peak in the summer of 2007 at which point the authorities and the banking industry looked for a solution. They eventually decided to start a High Court test case to decide if bank charges were fair and legal.

For now, the FSA and the FOS have put new claims on hold the judiciary also allows county court judges to stay any newly lodged cases. But the whole system is taking longer than was initially planned.

‘It’s Far More than I Thought.’

Banks have so far failed to overturn the OFT’s jurisdiction over the matter after a High Court and Appeal Court and now intend to appeal to the House of Lords later this year.

Their case is based on challenging the present High Court and Appeal Court rulings that under the 1999 Unfair Terms in Consumer Contracts regulations, the OFT can decide if their overdraft fees are or aren’t fair.

The second stage of the proceedings is unlikely to begin before next year, and will decide the fairness of the banks’ charges.

The OFT itself is also conducting an investigation, the results of which are unlikely to be concluded by the end of the year, which means that some claimants might have to wait a total of up to three years before they can pursue their frozen claims.

Are Charges Legal?

According to Mr Spooner: “most of the claimants would have been aware at the time they complained that their complaints would have been automatically put on hold.

“Surely the figure must represent the highest number of consumer complaints about a single issue?”

The banks have not yet admitted how many claims it settled before it put cases on hold, but estimates based on information from the banks’ annual reports for 2007 suggest that during the course of the year banks paid out £784 million to around 378,000 customers.

Many of these claims were made by customers going to their local county court with banks settling and paying up instead of risking a judge deciding that the charges are illegal.

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The Institute for Fiscal Studies (IFS) are warning that the government may have to find £39 billion each year by 2016 in order to get borrowing under control, on top of the £38 billion that the chancellor has already announced in the Pre-Budget Report (PBR).

When calculating these figures, the IFS assumed the government would have to cover losses of £130 billion, however, so far these have not been included in the government’s statistics. If this money is to be raised entirely by raising tax, families could face a tax rise of £1,250 a year.

Chancellor Alistair Darling will present his Budget on 22nd April, but has already warned that the recession will be more severe than initially thought.

He and Prime Minister Gordon Brown will meet with the governor of the Bank of England soon in order to discuss the decisions made at the G20 summit.

The IFS have also worked out that if the government plan to raise this money without using tax, a five year total public spending freeze will have to be employed. Though the government are planning on raising the amount needed primarily through reduced spending.

Conservatives Not Ruled Out Tax Rise

George Osborne, the shadow chancellor has said that the Conservative party have not ruled out tax rises, but will try to avoid them.

Just last week, leaders at the G20 summit agreed on a $1.1 trillion (£681 billion) plan to try and save the world economy.

The amount of resources available to the resources available in the International Monetary Fund (IMF) will be tripled to reach $750 billion and sanctions against secret tax havens will be introduces, including harder global financial regulations.

The Prime Minister has apparently said that he was “clear that the consensus reached at the G20 last week will make a difference to the lives and to the aspirations of families and businesses in the UK.”

According to a spokeswoman, the meeting would “help ensure that the new regulation and supervision agreed at the summit is effected in Britain so that people can have confidence in the banks, and that British companies can access the trade finance that is being made available.”

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President of the United States has called the G20 summit in London a historic turning point on leading to the world economic recovery.

Leaders attending the summit have said they will implement new spending and tougher financial regulations in order to ease the economic crisis.

President Obama will now head over to Strasbourg to talk with the French and German leaders about the changes before the next summit – the Nato summit.

In preparation for the summit, security around London is extremely tight with tens of thousands of troops and police on standby.

Just yesterday the police had a conflict with protesters and tear gas, rubber bullets had to be fired in order to stop a crowd gaining access to the city centre. Bus shelters were smashed, rubbish bins set on fire and apparently around 100 people arrested.

At a news conference late last night, President Obama said that the leaders of the summit had all agreed that “unprecedented steps to restore growth and prevent a crisis like this from happening again,” must be taken.

$1.1 Trillion Invested

In total, $1.1 trillion (£681 billion) is going to be put in to help sort the economic problems, $750 billion of this for the International Monetary Fund, $250 billion to help global trade, and $100 billion for international development banks in order to help the poorest countries.

They have also agreed that tougher financial regulations and sanctions should be introduced to stop secretive tax havens.

UK Prime Minister Gordon Brown, who is running the current summit said: “This was the day the world came together to fight back against global recession.”

The developing world has welcomed the moves that have so far been decided.

Brazilian President Luiz Inacio Lula da Silva has said that richer countries have engaged with emerging nations on equal terms in order to achieve good results.

Positive Results

The President of France, Nicolas Sarkozy had previously threatened to walk out on the meeting if it didn’t yield positive results.

Sarkozy’s comments after the meeting, his first with Obama, were very positive claiming it was ‘more than we could have hoped for’.  This will not be Sarkozy and Obama’s last meeting this month as the two are scheduled for one to one talks this Friday.

Obama will then be crossing the border into Germany for talks with Chancellor Angela Merkel, before the working dinner on Friday night in the German city of Baden Baden. All the leaders will be at the working dinner before the main talks on Saturday.

The US President, who with his new strategy for Afghanistan, is likely to use the occasion to build up support. According to Jonathan Marcus more troops are needed in Afghanistan, the BBC’s diplomatic correspondent has reported that the US is looking for large increases in financial support as well as more teams to train Afghanistan’s own security forces.

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Leading creditor organisation Civil Court Users Association has criticised the method being put in place to help people on low incomes survive the economic downturn.

The Debt Relief Orders are available to those who don’t own their own home, have less than £300 in assets, and a maximum income of up to £50 each month.

The government hope that these orders will prevent consumers in debt seeking help from loan sharks, but the Civil Court Users Association says that this kind of help for people in debt is at the expense of creditors.

The Orders will come into effect from the 6th April and will be available to those whose debts exceed £15,000 with no way to pay those debts back in the foreseeable future.

The orders are not issued through a court, but rather through an intermediary like Citizens Advice, who will then go through the Insolvency Service.

Debts Making Consumers ‘Physically Sick’

One woman from North Yorkshire has said she will apply for the Order after she took out loans while still employed, but now having £8,000 in debts and almost no assets of her own and no current job.

She claims that her financial problems are so bad that she has been physically sick. She said: “it got to the point where I was actually physically sick last week. I still have sleepless nights. I just don’t have the money to pay it.”

The Order itself costs £90, but is paid in instalments, compared to the hundreds of pounds it costs to go bankrupt.

The Citizens Advice Bureau has already worked out that around a third of the clients it will advise this year are likely to be eligible. This will be around 50,000 people.

Sue Edwards from Citizens Advice has said: “They offer people on very low incomes – who cannot pay their debts off within their lifetime – light at the end of the tunnel.”

If consumers are granted the order, their debts will be discharged after a year.

Desperate Times Call for Desperate Measures

However, some creditors are concerned that the Orders are too cheap and too easy to apply for, given the amount of debt people are finding themselves in at the moment.

The vice president of the Civil Court Users Association has said: “We believe the government is continually assisting debtors at the expense of creditors.

“We think these sorts of things get in the way.”

The Insolvency Service are expecting the intermediary groups to be making the basic checks on people applying for the order, and those found to be dishonest may have their order revoked.

The government minister responsible for the Insolvency Service, Pat McFadden has said he believes that enough measures have been put in place in order to protect creditors, and that Orders are needed to stop people in debt from resorting to desperate measures such as high interest lending and loan sharks.

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