Lord Melbury (Michael Gwynn) was Basil Fawlty's first upper-class guest and temporary idol in the pilot episode A Touch of Class. He was later revealed to be a confidence trickster.
Melbury saw Basil as an easy target, and reserved a room at the hotel, lying low there while planning a huge scam in Torquay. He was later caught out and arrested by Danny Brown, a member of the CID, who posed as a guest for a short while. Basil treated the phoney Lord ridiculously deferentially and pandered to his every need.
Melbury spoke with a refined English accent, deposited a hefty suitcase of valuables in Basil's safe (which later turned out to be several bricks), conned him out of £200, and almost got his greedy mitts upon Basil's collection of fine antique coins (a small investment) which Melbury insisted he should get valued by the Duke of Buccleuch (whom Basil later joked had had his head knocked off by a golf ball).
The circumstances of Melbury's arrest ironically scared away real aristocrats: Sir Richard Morris and his wife who vowed that they had never been in such a terrible place in all their lives – many innocent people would later think exactly the same.