Health supplement company closed for taking advantage of customers

10 Sep 2018 03:44 PM

Healthcare supplement company ordered into liquidation in the High Court after it was found to have taken advantage of elderly and vulnerable customers.

Vivid Lifestyle Ltd (Vivid) was incorporated in July 2013 and its’ registered office was in Hounslow, West London.

The company started business in 2014, selling nutritional supplement tablets wholly to UK customers before broadening its operations to international markets. By 2017, the majority of its sales were to customers in Australia and New Zealand.

Vivid enjoyed significant turnover, reaching over £1 million in 2017, with a gross profit margin of 91.4%, and sat in the centre of a multi-national trading operation, co-ordinating the activities of a telesales centre in India and a distribution centre in Reading.

Following complaints, however, the Insolvency Service launched an investigation into the Vivid’s activities and petitioned to the courts to wind up the company.

The court heard that Vivid’s customers, which included a significant proportion of elderly and vulnerable patients, were misled as to the worth and likely effects of the tablets sold to them at huge mark ups.

Vivid employed highly pressurised and persistent sales practices and techniques, including telesales callers making false claims to be qualified to give medical advice.

The court also heard that Vivid appeared to have abused customers bank and credit card information. Customers were charged for items they did not order, were told they had not paid for items when they had and were charged for repeat sales which they had not requested. In some cases, customers simply paid in order to be rid of the callers.

Vivid was wound up by the High Court Business and Property Courts in Manchester on 29 August 2018 and at the hearing, for which no company representatives were present, District Judge Matharu said she found Vivid’s manner of procuring business and payment “quite disgusting”.

She continued:

there is layer upon layer of taking advantage of those most least able or prepared to deal with the nature of the communications.

DJ Matharu said that the company “must be stopped”, and duly made an order that the company be placed into compulsory liquidation with the Official Receiver appointed as Liquidator.

Investigation Supervisor Irshard Mohammed, of the Insolvency Service, yesterday said:

The Insolvency Service has taken action against a significant number of companies selling everyday vitamin tablets to the elderly and infirm as a cure for whatever ails them. We will continue to do so.

Members of the public should be wary of anyone calling them, or their elderly or vulnerable friends or relatives, looking to sell them expensive medicines over the telephone.

Notes to editors

The petition to wind up the company was presented in the High Court of Justice Business and Property Courts in Manchester, on 25th July 2018, under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries by Company Investigations under section 447 of the Companies Act 1985, as amended. A Winding Up Order was made against Vivid Lifestyle Ltd at the hearing on 29th August 2018.

Vivid Lifestyle Ltd was incorporated on 15 July 2013 with the Company Registration Number 08610085. Its Registered Office on 29 August 2018 was 3 Foundry Mews Hounslow, P O Box 631, London, United Kingdom, TW3 9UB.

Since 2016, in addition to Vivid, the Insolvency Service has wound up nine other health supplement companies in the public interest after they scammed people, often the elderly and vulnerable, into unnecessarily buying their products.

All enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit, 4 Abbey Orchard Street, London, SW1P 2HT. Telephone: 0207 637 1110; piu.or@insolvency.gsi.gov.uk.

Company Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Energy and Industrial Strategy (BEIS).

Further information about live company investigations is available on GOV.UK.

The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), administers the insolvency regime, and aims to deliver and promote a range of investigation and enforcement activities both civil and criminal in nature, to support fair and open markets. We do this by effectively enforcing the statutory company and insolvency regimes, maintaining public confidence in those regimes and reducing the harm caused to victims of fraudulent activity and to the business community, including dealing with the disqualification of directors in corporate failures.

BEIS’ mission is to build a dynamic and competitive UK economy that works for all, in particular by creating the conditions for business success and promoting an open global economy. The Criminal Investigations and Prosecutions team contributes to this aim by taking action to deter fraud and to regulate the market. They investigate and prosecute a range of offences, primarily relating to personal or company insolvencies. The agency also authorises and regulates the insolvency profession, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.

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