Earlier this summer, Money Mail published an exposé of the devious tricks rebate firms use to extract cash from unassuming taxpayers.
These unregulated firms charge enormous fees for tax refunds customers can claim for free.
HM Revenue & Customs (HMRC) estimates that around 500,000 people are caught out every year.
Duped: HM Revenue & Customs estimates that around 500,000 people are caught out every year by firms charging hefty fees for tax refunds which customers can claim for free
And the taxman is now so concerned, it has launched a consultation aimed at stamping out unscrupulous behaviour.
To help its investigation, we called on Money Mail readers to share their experiences — and your response was overwhelming.
You named and shamed about 20 firms, and the treatment many of you received at their hands was truly shocking.
Scores of readers said they had been plagued by cold callers and even threatened with court action.
Others were left distressed and confused after discovering they were locked into contracts they had no recollection of signing.
And time and again, you said you had no idea that by merely entering your details into a ‘free check’ service online, you were committing to using a costly firm to make a claim.
We have now submitted a dossier of your evidence to the taxman.
Jonathan Athow, its director general for customer strategy and tax design, says: ‘This is an important consultation that will help us to better understand what’s happening.
We are grateful to the Daily Mail and its readers for sharing their experiences and views on repayment agents.
‘We want to make sure customers receive their full tax claims.’
However, Money Mail today implores HMRC to reconsider its decision not to include fees and charges as part of its investigation.
As your tales highlighted, taxpayers often don’t discover the true scale of the costs involved until it is too late to back out.
In the worst cases, the charges add up to more than the refunds are worth, leaving customers at risk of being left out of pocket. And many readers are still waiting for their money, despite agents having received the payments from HMRC.
We also urge the taxman to scrutinise the validity of the contracts these firms use before handing them households’ hard-earned cash. Your evidence shows it is crystal-clear that far tougher action is needed.
If you were in any doubt, here we highlight some of the worst cases we have seen…
Review: The taxman is now so concerned about the rebate firms, it has launched a consultation aimed at stamping out unscrupulous behaviour
Threatened with court
Many readers reported receiving letters threatening court action from Hidenda Tax Limited. Most had spotted an advert online for a ‘free check’, offering to find out whether they were entitled to a marriage tax allowance refund.
At the top of the website, the firm states that filling in the form is ‘100 pc free and no obligation’.
If a customer is eligible, a message pops up saying: ‘Good news! You could be owed £1,200.’
But readers did not realise that by answering the remaining questions, they were locking into a ‘legally enforceable’ contract.
At the final stage, customers are asked for an electronic signature and to tick a box confirming they agree to the firm’s terms and conditions. Buried in this 4,500-word document, it states that they must pay a £300 fee if they later want to cancel — even if they have ticked the box without answering all the questions.
Hidenda has then sent heavy-handed letters chasing the missing information because it cannot lodge a claim without it.
Some readers also say the company, which reported a profit of more than £1 million between April 2020 and March 2021, threatened them with debt collectors because they hadn’t provided a signature.
Patricia Young, 81, says she wakes up every morning dreading what the postman might deliver. Patricia and her husband Kenneth, 79, from Kent, had clicked on the first website they found and thought they were making a marriage tax allowance claim with HMRC.
Soon afterwards, Patricia was sent emails from Hidenda requesting Kenneth’s signature, which she says she didn’t see.
Hidenda then sent a letter threatening to bill the couple £300 if they did not respond, and warning it could instruct a debt-recovery company to retrieve the fee.
Another reader, Gordon Hopkins, 73, received a county court claim from Hidenda for a fee of almost £400.
The pensioner, from Staines, Surrey, filled out what he thought was a free marriage tax allowance eligibility check online earlier this year. He and his wife then went away to Spain for four weeks and did not realise Hidenda had sent them two letters in that time.
The first letter demanded missing information, including their National Insurance numbers and his wife Gill’s signature. The firm said that if they did not respond, they would have to pay a £300 cancellation fee, which could be collected by a debt-recovery company. A second letter threatened court action and included a claim made by the company at Derby County Court. The cancellation fee had been hiked to £385, including legal costs and a £35 court fee.
‘I just can’t see how it could have incurred any costs with the little detail I provided,’ Gordon says.
Between April 2021 and April 2022, the Financial Ombudsman received a dozen complaints about Hidenda, which is a trading name for Harwood Claims Management Limited. It says most were about ‘charges, fees and commission’ and that the issue of electronic signatures also cropped up.
Consumer reviews site Trustpilot also issued a formal warning to the firm after Money Mail found out a photo used in a positive review was a stock image used elsewhere online.
A Trustpilot spokesman says firms are not allowed to use stock imagery in a manner that suggests the photograph is of the reviewer. It has since been removed.
Hidenda confirmed that no court hearings had gone ahead. And after Money Mail contacted the firm, it agreed to close Gordon’s file and cancel Patricia and Kenneth’s contract.
The firm adds that asking for an electronic signature and having a tick box to agree to terms and conditions is standard practice to enter into a legal contract online. But Gary Rycroft, a solicitor at Joseph A. Jones & Co, warns that an electronic signature is valid only if the person knows what they are signing for. ‘My gut feeling is if that went to a trial with the question of whether it was a valid agreement or contract, the answer would be no. It could be seen to be misleading,’ he says.
Plagued by cold callers
Several readers said they had been bombarded with cold calls and text messages from Wyndan Group Limited, trying to persuade them to make a marriage allowance claim via the firm. Many had no idea how the company had obtained their contact details.
Money Mail reader Anne Best says she has been hounded by messages from Wyndan since August 2019.
The 73-year-old, from Frimley, Surrey, ignored all the texts, which asked her to click on a link to sign an electronic document. She then received a phone call from the company in early 2021.
‘The woman said she would check if I was eligible for a marriage allowance rebate. She didn’t say she was doing it. As far as I was concerned, that was all it was,’ she says.
Yet even though she ignored further messages requesting that she sign a form, she received an email in October including a ‘signed copy of her documents’. Anne says she didn’t recognise the signatures for herself or her husband John, 75.
Several readers said they had been bombarded with cold calls and text messages from Wyndan Group Limited, trying to persuade them to make a marriage allowance claim
She adds that her husband did not know anything about her correspondence with the firm, so he couldn’t have signed anything.
The document was dated August 8, which was the same day she had received (and ignored) a text asking for an e-signature.
In February of this year, John received a letter from HMRC saying he was due a tax rebate of £247 but that the cheque had been sent to Wyndan.
It means he will not receive the full amount, as the company, which comes under the umbrella of financial services group Silkston Limited, charges a punitive 35 per centof any refund paid, plus VAT, along with a £100 administration fee.
Anne says: ‘I’m frightened to open anything else in case that means I am agreeing to any of their terms.’ She was unable to get through to Wyndan by phone. The firm did not respond to requests for comment.
Another firm, Mortgagesmiths Limited, repeatedly cropped up among readers’ complaints. Geoffrey Lewis says he had never heard of the company until he received a letter from HMRC saying it had sent the agent a marriage allowance rebate amounting to nearly £1,000.
The 72-year-old from Gloucester says he doesn’t recall giving the firm permission to claim on his behalf.
After Money Mail intervened, the company sent Geoffrey a copy of the contract that he and his wife Diane, 74, had allegedly signed.
He says that although his signature looks vaguely similar to his own, the one for his wife looks nothing like how she signs her name. He maintains he has never seen the form before.
Mortgagesmiths says Geoffrey filled it out online in February. It adds that any details would never be available to the company unless customers provide them — and it is only when it receives this information that it is able to submit and pursue a claim.
Another common gripe about Mortgagesmiths, which also goes by the name My Marriage Tax, is the high fees it charges.
Of the £972.63 Geoffrey was owed, Mortgagesmiths sent a cheque for just £444.13.
Another reader did not receive a penny of their payout, after the company’s charges totalled more than the rebate.
The customer was eligible for a £201.08 marriage tax refund but the agent’s fees added up to £204.45. This meant they were left with a £3.37 debt to the company.
Mortgagesmiths wrote off this remaining balance as a ‘gesture of goodwill’.
Other firms we received numerous complaints about included Brooksdale Limited, Tax Credits Limited and Ensign Advisory Limited, which also trades as Touchstone Consulting Group and Total Tax Claims Limited.
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