UK Self-Storage Operator Store First Accused of Pension Fraud

Store First, the self-storage brand of U.K.-based real estate developer Group First, has been accused of conducting a pension-fraud scheme, luring £100 million in investment through sales company Jackson Francis Ltd. Marketing materials, including video, reportedly made investment-return guarantees, which investors have said didn’t materialize. The self-storage operator told the source it was unaware of the allegations and wasn’t responsible for the sales strategies deployed by Jackson Francis.

In some Store First marketing videos posted to YouTube, investment claims are made that offer “a guaranteed return of 8 percent in the first two years, rising to 10 percent in years three and four,” the source reported. Some investors who directed their pensions to Store First told BBC Radio that the returns promised by the company weren’t true.

Former sales agents for Jackson Francis told the BBC they were instructed by their immediate supervisors to lie about returns to get clients to invest. They admitted to forging documents and said they witnessed other staff forge client signatures onto documents, the source reported. One sales agent told the BBC he saw staff checking a box on forms indicating clients were OK with a high level of risk even though the question had not been asked of investors.

In September 2014, the Self Storage Association of the United Kingdom warned investors that there were inaccuracies in Store First marketing material, alerting them to potential risks, according to the source.

During a two-year period, Store First owner Toby Whittaker paid £33 million in commission to Transeuro Worldwide Holdings Ltd., the Gibraltar-based financial lead-generation services company that funded Jackson Francis, according to the source. Based in Liverpool, England, Jackson Francis is now in liquidation.

Jackson Francis acted as a sales agent for Store First, according to Whittaker, who maintains the self-storage operator wasn’t responsible for tactics used by the sales firm. "My company's sales agents are not employed to give financial advice; they are employed to explain the product, not to advise whether [it] is suitable for an individual's investment portfolio," he told the source.

A “wind up” petition was filed in British court on Oct. 7 against Transeuro, aiming to force the company into liquidation. The Transeuro website is offline, displaying only a note that says the site is undergoing maintenance. Transeuro was controlled by Mike Talbot, identified by the source as a friend of Whittaker and the former co-director of Store First Midlands Ltd. Whittaker and Talbot previously operated Dylan Harvey, a property-investment company that went out of business while owing investors millions, according to the source.

Talbot told the source he had no management or control of Jackson Francis and couldn’t comment on the allegations. An unidentified director of Jackson Francis reportedly said he was unaware of the alleged sales tactics.

Headquartered in Padiham, England, Store First has 12 self-storage facilities in England, mostly in the northwest region, and one in Scotland. The company’s model blends traditional self-storage units with full business amenities for small enterprises, including use of P.O. boxes, free WiFi and private meeting rooms. Site amenities include office facilities, breakout areas, packaging and shipping services, complimentary moving services, and reception areas. Security includes closed-circuit television, coded electric gates and perimeter fencing.

Group First’s property portfolio includes residential, business, self-storage and vehicle-storage assets.