Online small business directory shut down by court
5 Mar 2019 12:44 PM
Preston company behind online small business directory shut down by the courts after customers complained they were harassed to pay bills they did not owe.
At the High Court in Manchester on 26 February 2019, OBD Ltd was wound-up in the public interest before District Judge Khan. The Official Receiver has been appointed liquidator of the companies.
OBD Ltd was the limited company which traded as www.theobd.co.uk, an online directory for small businesses that signposted their client’s website. The company targeted small businesses with their own website and used keywords to further boost their clients’ internet rankings.
Having commenced trading in 2012, OBD Ltd built-up around 3,500 customers by cold calling small businesses before charging them between £50 and £250 per year for a listing. Contracts were either for one or two years and would auto-renew if the customer did not cancel themselves.
However, the Insolvency Service carried out confidential investigations after customers had complained they were being pursued for liabilities they did not believe they owed.
Investigators discovered that the company used deceptive methods to persuade customers to sign up for its services, including stating or implying that OBD Ltd represented or was connected with an international web browser.
OBD Ltd failed to provide contract documents to clients, in some cases used ambiguous contract terminology and made it difficult for customers to get out of rolling contracts, while also using coercive and intimidating debt collection methods.
In addition to these grounds on which the Secretary of State sought to wind-up the company, investigators demonstrated that OBD Ltd failed to provide services customers paid for in a timely manner and in some cases not at all, was remiss in issuing renewal invoices, issued incorrect invoices and took payment without authorisation.
Investigators did establish that turnover from February 2012 to April 2018 was £713,000 but enquiries were further hampered because OBD Ltd failed to maintain adequate accounting records or file statutory documents.
Scott Crighton, Chief Investigator for the Insolvency Service, said:
Small businesses use online directories in the genuine hope that they will secure more work. However, OBD Ltd took advantage of their customers and often used bully-boy tactics to elicit money for inadequate services.
We welcome the courts decision to shut down OBD Ltd, preventing anyone else coming to harm, and I would urge any business that is called out of the blue to sign-up for a similar service to do their homework before entering into any agreement.
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 2 Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Email: firstname.lastname@example.org.
Notes to Editors
OBD Ltd (CRO07936953)– incorporated 06/02/2012
The petition was presented under s124A of the Insolvency Act 1986 on 15 October 2018.
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 & Industrial Strategy (BEIS). Further information about live company investigations is available here.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available here.
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