Zavvi Direct customers still waiting on refunds

Sussex Police investigate suspected fraud by online retailer

Dinah Greek, Computeract!ve 02 Jul 2008

Some customers of Zavvi Direct are still being refused refunds despite investigations by police into suspected fraud by the people who ran the site.

This is despite the fact that, if it is fraud, most people, even if they used a debit card, should be protected by the Banking Code of Practice.

Computeractive reader Matt Parkhouse told us: "My bank are saying as I used my debit card and authorised the payment, they won't credit me."

We began investigating Zavvi Direct three weeks ago following a reader complaint. We found a disturbing level of sophistication in the way this suspected scam had been set up.

The site, which went live on 4 June, had fooled more than 2,500 people into thinking they were dealing with the high street retailer, Zavvi – formerly Virgin Megastores.

Tony Burman told us: "Like a fool I too ordered a Wii Console and a Wii Fit package totalling £229.98. The old saying 'There’s one born every minute' is ringing in my ears."

But Mr Burman wasn't alone – nearly everyone that went to the site found it so convincing that it netted orders for Wii Fits and other devices worth more than £200,000 before the the site was taken down on 13 June. This was carried out by the webhosting company, uk192.com, after it was warned by Zavvi's lawyers that the site was guilty of trademark infringement.

Although Zavvi Direct had been registered at Companies House on 6 February this year, with a Paul Clayton of Hove listed as director, Mr Clayton denied he had any involvement.

His solicitors, Thomson Snell and Passmore, gave us this statement last week: “We have been instructed by Mr Paul Clayton. His details have been fraudulently given to Companies House as a director of a company called Zavvi Direct Limited. Our client has been the victim of identity theft and fraud.”

To complicate matters further, we also discovered a possible link between Zavvi Direct and a scam investigated by Kent Police last year. That fraud involved a company calling itself Best Sports World (BSW). We found that Zavvi Direct had used BSW terms and conditions on a sister site, ZavviSports.co.uk. BSW had also registered itself at Companies House. Again the men listed as directors claimed identity theft.

Although we managed to contact a man calling himself Simon Bishop at Zavvi Direct on a mobile phone number, the phonelines are now dead or go to voicemail and the offices at 20 Old Steine, Brighton are empty.

The Economic Crime (Fraud) Unit of Sussex Police in Brighton have now begun interviewing people whose names have been linked to the company and to its office address. It is not yet known who is behind the site or if police can trace them.

If this is officially proved to be a case of fraud, although it may take the banks some time to untangle the mess, most people should get a refund.

Computeractive has learned that around £50,000 from the company’s Abbey National business account has been frozen. We also discovered that the acquiring bank, which gave Zavvi Direct its merchant credit facilities, had frozen funds in a holding account used for online payments.

Apacs, the payment organisation, said people should also be covered by the Banking Code of Practice. This voluntary code gives bank account holders protection in cases of fraud, no matter what type of card they used.

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