Charity shops and good
causes are losing millions of pounds a year to bogus second-hand goods
collectors who profit from our desire to help others. Each week, gangs
push millions of leaflets through letterboxes from the north of
Scotland to Cornwall announcing a clothing collection and asking
homeowners to leave out unwanted textiles and shoes on a particular
day. Most imply the collection is to raise money for the poor,
homeless, or animals.
Others say the clothing will be sent to
eastern Europe or developing countries to help those who cannot afford
new garments. Guardian Money has seen dozens of these leaflets since
drawing attention to the scam in Capital Letters earlier this month.
Often,
dodgy garment gatherers will use names such as Angel of Goodness, Angel
of Help, or Island of Hope. And many will use pictures of "orphans" or
"street children" on the leaflets.
Others use words like
"recycling", potentially causing confusion with real charities such as
London's Evergreen Trust which collect a wide variety of goods
including phones and printer cartridges for genuine projects.
But
the reality is that at best these leaflets come from commercial
enterprises - almost entirely organised by eastern Europeans -
pretending to be connected to good causes.
At worst, the leaflets
are a fig leaf for organised thieves who steal goods left on the door
step for genuine appeals - often getting to homes minutes before real
charities such as the British Heart Foundation, Scope and the Salvation
Army.
Either way, registered charities that collect unwanted
goods door-to-door to sell in their high street shops or for recycling
projects are angry.
"Our members are losing £2m to £3m a year -
and at the moment it is at the high end of that range," says Lekha
Klouda, director of the Association of Charity Shops, which speaks for
270 charities with more than 7,000 shops nationwide. Members include
Oxfam, Cancer Research and local causes such as hospices and animal
rescue centres.
"That's what we know we lose and we've been
monitoring the situation since 1997 when we first alerted the
government to the problem. At the moment, we are losing a lot because
the peaks and troughs of economic cycles are putting a premium on
second-hand UK clothes," she says.
The bogus collectors ship
clothing to be sold on overseas street stalls, mostly in eastern Europe
and Africa, pocketing the profit and giving nothing to charity.
While
designer labels fetch the highest money, mid-market names such as Next
or Marks & Spencer sell for good prices as well. Even Primark and
Tesco labels are worth something, and half-used cosmetics find a
market, too. Mixed textiles are worth about £85 a tonne.
But the
real loss to charity shops could be far higher than Ms Klouda's
estimate because phoney charity collectors erode people's giving
instincts.
"They may not trust the bags given out by our
legitimate members or collections by other charities," she says. "You
can't quantify that. It's a loss of confidence which may affect other
forms of charitable giving."
When the bogus collections first started, those behind it either stated or implied they were legitimate charities.
Now they realise that this deception can cause trouble with the police.
"These
days they set themselves up as limited companies," says Michael Lomotey
of Clothes Aid, a not-for-profit company that collects and sells
clothing for a number of causes that do not have charity shops,
including children's hospitals such as Great Ormond Street in London
and Liverpool's Alder Hey.
"It is easy to register a company," he
says. "They buy one from a company formation agent off-the-shelf,
change the name to something seemingly charitable, and have two
directors who may or may not know their names have been used, but who
will never be directors of any other company. They register it at a
short-term address - a mail drop, bedsit, rented flat or shop. There is
no real cross-checking to ensure these details are genuine.
"They
then ignore the annual returns and accounts demanded by company law
until the company is struck off. Even then, many will continue to
collect."
Mr Lomotey has tracked nearly 100 of these companies -
mostly phoney. "They rarely last longer than a year," he says. "By
then, they have fulfilled their purpose."
But although trading
standards officers and Consumer Direct have produced warnings about
bogus collectors - including a spoof from Cardiff trading standards
with lines such as "Clothing Scam Company", "Please Line Our Pockets"
and featuring a picture of "third world children in need" - Mr Lomotey
believes few people are now caught out by phoney pamphlets. The main
problem is theft from doorsteps, including Clothes Aid's own bags.
"The
criminals behind this use the 'clothing collection' leaflets as a
front. They are much more interested in stealing bags which they can
then ship to market trader friends in eastern Europe. They find out
when a legitimate collection is due, and go out ahead of the genuine
people. They re-pack everything in black bin liners and, if they are
asked by the police, they point to their own leaflets as an excuse to
be on that street. We reckon this is worth £10m a year to them," he
says.
But very few bogus collectors have been prosecuted. "We've
tracked around 90 arrests - all bar two were Lithuanian nationals. We
don't think these people ever pay tax. And Cardiff police intercepted a
30-tonne container at the docks."
Prosecutions fail because the
law in this area is not enforceable. Bogus collectors exploit loopholes
in the Theft Act - usually because no one complains or even notices
that bags left for a real charity are stolen. And no single government
department takes responsibility.
Earlier this year, when he was
minister for the Third Sector, Ed Miliband held a meeting with
legitimate charity collectors, charity shops, trading standards and
other interested parties. He gave a commitment to finding a way to
clamp down on bogus collections and told enforcement authorities to
come up with a public awareness campaign.
