NARROWBOAT COMPANY WOUND UP FOLLOWING DTI INVESTIGATION

20 Jan 2005 02:45 PM

A high pressure sales operation marketing timeshare on narrowboats has been wound up following a DTI investigation.

Charter International and its successor business, Charterline, sold over 250 timeshares, ranging from 3,000 to 9,000, for a week each year on a narrow boat. In total they took over 1m in sales receipts. The company owned six boats moored at Penton Hook Marina in Chertsey, Surrey.

Customers were recruited via cold calling and street marketing surveys to sales presentations at hotels in Maidenhead and Chester, having been tempted by offers of free overnight stays, food and drink.

Once at the presentations, sales staff made a series of misleading promises in a bid to win customers. They claimed that the timeshares were also an investment opportunity, as owners could opt to rent out their allocated weeks over the 35 year lifetime of the timeshare holding. The company had no means of supporting this claim.

The sales staff inferred that timeshare holders would own a share of a specified boat, when in fact the timeshare was only available for a pool of boats. It was also claimed that the boats would be replaced every five years, with contributions from yearly management fees allocated to a replacement fund. DTI investigations revealed that no such provisions had been made.

The directors of Charter International and Charterline were Joanne Simmonds and Stewart James Tait. Jeffrey Armstrong, an undischarged bankrupt, was the sole recorded director of Countrywide, an associated company set up to provide telemarketing services.

The High Court in London heard that Charter International continued to trade while insolvent. The company fell into financial difficulty in July 2004, severely exceeding its overdraft limit. However, sales staff continued to sign up new members, even though they no longer had any boats to offer.

The DTI uncovered unpaid debts owed to the Inland Revenue dating back over two years, as well as unpaid VAT bills. There were also numerous unattributable cash withdrawals made from the Charter International bank accounts throughout its trading history.

Consumer Minister Gerry Sutcliffe said:

"Regulations protecting consumers have largely driven the cowboys out of the UK timeshare market. But those looking for long term travel deals may still come across unscrupulous sales tactics, and I would urge them to be on their guard.

"Consumers should be very wary of incentives that lead them to high-pressure sales seminars. Holiday clubs and unregulated timeshare, for example timeshare on boats, could turn out to be nothing but a money making scam, so don't fall for pressure selling. If in doubt, walk away."

Notes to editors

1. UK consumers are usually protected against timeshare pressure sales. The law entitles people to a 14 day cooling off period during which they can withdraw from the contract. The seller cannot accept any money from the buyer until the end of this period. Boats are not covered by timeshare legislation because they are not a building or a caravan. However, all timeshare sales methods and agreements are subject to broader consumer protection legislation, covering misleading advertising, distance selling, and unfair terms in consumer contracts.

2. A petition to wind up the companies was presented to the High Court on 14th October 2004 following enquiries conducted under Section 447 of the Companies Act 1985. The Official Receiver was appointed the liquidator of the companies on that date.

3. The petitions were presented under Section 124 of the Insolvency Act 1986.

4. The Official Receiver has been appointed as liquidator of the companies and will be responsible for investigating the circumstances of the companies failures and the conduct of the companies directors.

5. The registered office of Charter International and Charterline is that of the accountant for both those companies, Hardy & Company Accountants Limited, 10 Mostyn Street, Llandudno, Conwy, LL30 2PS. The registered office of Countrywide is at Crossbow House, 40 Liverpool Road, Slough, Berkshire, SL1 4QZ. Charter International was incorporated on 26th April 1996, Charterline was incorporated on 16th August 2004 and Countrywide was incorporated on 31st July 2003. All public enquiries concerning the affairs of the companies should be made to the Official Receiver at:

The Insolvency Service
Public Interest Unit
PO Box 203
21 Bloomsbury Street
London
WC1B 3QW

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