Solicitors & Attorneys

Ellis Jones
Solicitors
99 Holdenhurst Road
Bournemouth
Dorset
BH8 8DY

27 May 2008

By Fax

Our Ref: VM/007630

Your Ref: SL/KW/005556

Dear Sirs,

Re: Redsave and www.hotukdeals.com

Overview

We refer to our previous correspondence and your letter purporting to comply with the Pre-
Action Protocol.

Your draft Particulars of Claim complain that various postings on our client’s site allege your
client operated “a con”, “a scam”, “a rip off.”

Our client operates a consumer forum where the public volunteer information on their
experiences for the benefit of others. The public are entitled to share their experiences with your
client and to comment on those experiences and on the experiences of others.

The central theme of complaints on our client’s site is that consumers who sought to purchase a
single item from www.redsave.com were misled into unwittingly subscribing for a ‘Shopping
Pass’ for a monthly fee of £19.95, without their understanding, consent or agreement. This
‘Pass’ proved extremely difficult to cancel and Redsave continued to charge credit/debit cards
despite efforts to stop them. We understand your client refused to refund all or many of the
consumers.

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Your client admits some consumers have cause for complaint and we believe that the
characterisation of your client’s “Shopping Pass” as a “scam” is obviously fair comment. We
understand your client continued to do business in the manner complained of for a substantial
period despite the complaints. A fair-minded person could express the view that this was, in its
conception and its operation, “dishonest.” We believe a Jury would agree.

We believe our client has defenses of justification, privilege and fair comment and we will rely
on what appear to be hundreds of complaints.

Other threats

Your client purports to have “no desire to ‘silence’ those who have complaints” and recognizes
“internet message boards are the right place for consumers to… voice their [concerns]”. This is
hardly consistent with your client’s scorched earth Takedown campaign – threatening all who
carry the complaints of its aggrieved consumers.

As advised, we are co-operating with the many others so threatened, who are also investigating
the complaints, and you will meet a united front. We note the respected financial journalist,
Martin Lewis, has publicly announced he has commissioned an investigation of your client and
invited aggrieved consumers to contact him. We also note your client featured in the consumer
section of The Guardian newspaper on 24 May 2008. Your strategy cannot possibly succeed in
the face of this co-operation.

Underlying Facts

In relation to justification, privilege and fair comment, your client must identify what it says is
factually inaccurate. Maintaining it is not guilty of a “scam” when this so obviously comment,
will not suffice. You must advise which underlying facts are accepted and which are denied. In
this we are greatly assisted by your many admissions, and have fashioned our questions below
around them.

Facts

1. From Autumn 2006 to 28 February 2008, is it correct that Redsave.com had the following
features?

a. On product pages displaying the Redsave price, no warning was given that the
customer must join a monthly membership service for £19.95 per month in order
to purchase the product at the price displayed. It stated ‘Free 30 day RedSave
Trial Pass Worth £19.95’, with a delete option.
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b. On the checkout pages, below the product(s), it stated ‘Free 30 day RedSave Trial
Pass Worth £19.95’, with a delete option. There was no warning that after the 30
days, the credit or debit card used for the purchase would be debited £19.95
monthly.

c. Unless the buyer clicked on a link described only as ‘More Info’ no warning was
given on the product or the check out pages that after the 30 days, the credit or
debit card used for the purchase would be debited £19.95 monthly.

d. In the buying process, the first time a buyer could access the Terms and
Conditions was on the page on which the credit or debit card details had to be
entered.

2. Is it correct that from Autumn 2006 to 28 February 2008, the email order confirmation
made no mention of a monthly subscription charge of £19.95 and the first monthly
membership charge for the ‘Shopping Pass’ was deducted within the first 30 days and
before customers’ next credit or debit card bill was typically issued? Is it correct that
Redsave received complaints from customers alleging this? Please provide particulars
and copies of all documentation including the relevant electronic customer histories.

3. Is it correct that from Autumn 2006 to 28 February 2008, the Terms and Conditions
provided that cancellation could only be on Redsave’s special cancellation form and had
to be sent by recorded delivery mail and that email and telephone cancellations would not
be accepted?

4. Is it correct that commencing in late 2006/early 2007, Redsave began to receive customer
complaints about the features and practices in 1 a-d, 2 & 3 above and the ‘Shopping
Pass’? Please advise when the first such complaints were received by Redsave and how
many complaints have been received. Expressed as a percentage, how may of the
complaints about the “Shopping Pass” have led to customers being refunded the monthly
fee(s) they had been charged?

5. Is it correct that Trading Standards investigated Redsave at the instigation of a special

consumer group, called the Redsave Action Group, formed with the objective of seeking
redress and refunds for consumers? Is it correct that Trading Standards reported back to
that Group on or about 27 February 2008 that Redsave had amended the Website and its
practices? Please explain your statement that Trading Standards had “overseen” the
operation of the ‘Shopping Pass’ for 15 months. Please explain what you mean by your
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statement that Redsave was not “ordered” to make changes by Trading Standards. We
note that it was reported in The Guardian article – obviously based on what your client
had said: “After discussions with local trading standards, Redsave says it has amended
its site to make the membership, which cuts in after 30 days, clearer.” Please provide
copies of all correspondence with Trading Standards. We will be seeking these on
disclosure and we suggest you provide them now.

6. Is it correct that the changes made on or about 28 February 2008, included the following:

a. The Redsave.com home page was changed and includes the statement ‘a
Membership of £19.95 a month could result if a lower-priced item is purchased’.

b. The check-out page was changed to display:

“1 x Free 30 Day RedSave Trial Pass Worth £19.95 Free for 30 days then £19.95
per month, cancel anytime More Info.”

c. The top of Terms & Conditions were changed to include the statement:

“Customers purchasing goods at the ‘Redsave’ price should pay particular

attention to sections 28 to 36 below.”

d. The final page where the credit/debit card details are input, was changed to
display:

“1 x Free 30 Day RedSave Trial Pass Worth £19.95 Free for 30 days then £19.95
per month,cancel anytime More Info”and the Terms and Conditions.

7. Is it correct that you have subsequently made additional relevant changes to the Website?
If so, please advise what and when.

8. Does your statement “it is accepted that certain elements of the Redsave website design
have in fact proved difficult for very small numbers of its customers to understand…”
refer to the matters in §1 a-d, 2 & 3 above? If not, please specify exactly which elements
you refer to. Do you refer to the ‘Shopping Pass’? Please specify what you mean by a
small number and see below.

9. As to your statement, “there do (sic) appear to be a very vocal minority of customers who
—for varying reasons and with varying degrees of justification—have had a complaint
with Redsave….” Do these justifications include the matters in §1 a-d, 2 & 3 above? If
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not what do they include? Do they refer to the ‘Shopping Pass’? Please provide
particulars. In relation to all of the customers who have complained directly to Redsave,
whether by phone, letter, email or fax or any other means whatsoever, please provide
copies of all documentation including the relevant electronic customer histories. Again,
we will be seeking these in disclosure.

10. As to your statement “It is accepted by our client that there have been problems with the
Redsave operations…” do these problems include the matters in §1 a-d above? If not
what are these problems?

11. As to your statement “the suggestion that Redsave is operating outside the law….is
simply false,” does this statement refer to the period prior to 28 February 2008? Do you
say that Redsave was in full compliance with all relevant consumer protection legislation
from Autumn 2006 to 28 February 2008? Do you contend more particularly that Redsave
was in compliance with the Unfair Contract Terms in Consumer Contracts Regulations
1999 and the Distance Selling Regulations 2000 from Autumn 2006 to 28 February
2008? Alternatively, do you contend that Redsave has been in compliance since 28
February 2008?

12. As to your statement “had considerable problems with suppliers….especially difficult as

these problems came to light shortly before Christmas” please confirm that this was
Christmas 2006. Please advise what impact this had on customers and how those
complaints were resolved by Redsave. As to, “Similarly…in the last Christmas period
some customers were affected by significant delays in the delivery of products they had
ordered” please confirm this was Christmas 2007. Please advise what impact this had on
customers and how those complaints were resolved by Redsave.

13. We understand Redsave commenced County Court actions for libel against members of
the Redsave Action Group, in which it represented itself, and that these claims were
struck out. We also understand that Redsave has threatened others with libel actions and
we understand it has issued proceedings in at least one other case. Please provide us with
copies of all Statements of Case in past and present litigation arising from the facts in
issue. Please also provide copies of all other Takedown notices arising from the above
facts.

14. Please advise why changes were not made to the ‘Shopping Pass’ and the site for many
months after complaints were first received.

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15. In relation to your letter of 23 May 2008, you appear now to be making complaints on
behalf of Max Walker. Are you now instructed by Mr Walker?

Our client will resist your attempts to silence the messenger. It will also be posting the
correspondence between us—however marked.

Please provide your answers and response by the close of business on 30 May 2008.

Yours faithfully,

Victoria McEvedy

McEvedy & Associates