Insolvency Service
detoxes the business world of 27 misleading health supplements companies
News Release issued by
the COI News Distribution Service on 08 September 2010
Twenty-seven
companies involved in the mis-selling of health supplements have
been wound up in the High Court following an investigation by
Company Investigations of the Insolvency Service.
The investigation found that all of the companies (see list
below) had their registered offices in the County Durham area but
traded internationally, mainly from locations in Barcelona and
Malta by placing "Free Trial Offers" for health
supplements on numerous websites.
Customers responding to a "Free Trial Offer"
supplied their payment card details believing that only a small
charge to cover postage and packaging (typically £3.95) was
required. However, if the customer failed to cancel the “Free
Trial Offer” within the cancellation period (usually 15 days) they
were deemed to have agreed to an ongoing supply of the product
from the companies, at a cost of around £70 to £80 each month.
Commenting on the case, Stephen Speed, Chief Executive of The
Insolvency Service said;
"The Insolvency Service is determined to come down hard
on companies who seek to rip off the public by mis-selling
products. I urge all consumers to be vigilant when it comes to
‘free trial offers’, and remember if it looks to good to be true,
it often is."
Analysis of the available records for just seven of the companies
found that they had turnover in excess of $19 million in the
period August 2009 to March 2010 which was processed through
merchant accounts based in Germany.
The products offered by the companies included Acai Berry Detox,
Acai Power, Effective Acai, Acai Detox, Absolute Acai, Colon
Cleanse Fresh, Colon Purify, Life Cleanse, Resveratrol, Resvmax,
Miraculous Teeth Whitening, PureClean Teeth, Dermasensation and Dermainfuse.
The investigation found that there was a serious lack of
transparency as to who controlled the companies with the named
directors being otherwise unconnected individuals residing in the
Consett area of County Durham. Those spoken to by the
investigators said they knew nothing about the affairs of the
company of which they were the only director and said their only
task was to forward any post received for the companies to a local
formation agent, Brinken Merchant Incorporations Limited. Each had
been approached to act as a director by Brinken who paid them
around £150 a year.
However, the Court heard that 25 of the companies were found to
be under the common control of Local Billing Solutions Limited
("Local Billing"), a company registered in
Malta. Local Billing maintained throughout the inquiry that it
acted only as a payment processor and that the beneficial interest
in the companies belonged to Canonizado International, a company
said to be registered in Panama, of which the investigators could
find no trace. On the documents available, the investigation
established that the beneficiaries of the companies’ trading were
most likely to be Local Billing and its principal Clayton
Douglass.
Grounds for winding up the companies included,
· The websites used by the companies misled customers into
believing that the trial offer was risk free and limited in nature,
· The terms and conditions of the offer were designed to confuse
the customer and were not provided in any durable medium,
· The length of the trial offer was not made clear. Customers
were provided with a 30-day supply of the product, but had,
typically, only 12 days from receipt of the product in which to
cancel any future supply,
· The companies abused the privilege of trading through a limited
company by effectively continuing the same method of operating as
that used by Trading Planet Limited, Viv3lab Limited and Vivera
Limited. Those three companies having previously been wound up by
the Court in the public interest.
The winding up orders were all made on 26 August 2010.
Winding up petitions were presented on 21 June 2010 against:-
LB Belvedere Limited, LB Cygnus Media Limited, LB Deluxepass
Limited, LB Eridanus Entertainment Limited, LB Evil Angel Limited,
LB Friendfinder Limited, LB Global Web Solutions Limited, LB
Internet Media Productions Limited, LB Ilogic Solutions Limited
Winding up petitions were presented on 22 June 2010 against:-
LB LFP Internet Limited, LB Lyra Entertainment Limited, LB Nomad
Media Limited, LB Pegasus Media Limited, LB Price Communications
Limited, LB RSC Limited, LB Southint Prop Limited, LB Watt Media Limited
Winding up petitions against the following companies were
presented on 23 June 2010 and on 25 June 2010 the Official
Receiver was appointed as Provisional Liquidator of the companies:-
LB Carsed Marketing Limited, LB Nakedsword Limited, LB Cassiopeia
Media Limited, LB Cybernet Entertainment Limited, LB RHS Limited,
LB Pride Studios Limited, Intercontinental Consignment Logistics
Limited and Gillmap Limited
Petitions to wind up Fyso-UK Limited and H5-UK Limited were
presented on 13 July 2010.
Ends
Notes to Editors
1 A full list of the companies, their dates of incorporation and
registered office addresses may be obtained by contacting the
Insolvency Service Press Office (details below)
2 The Insolvency Service administers the insolvency regime,
investigating all compulsory liquidations and individual
insolvencies (bankruptcies) through the Official Receiver to
establish why they became insolvent. The Service also authorises
and regulates the insolvency profession; deals with
disqualification of directors in corporate failures; 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 is available from http://www.insolvency.gov.uk
3 All public enquiries concerning the affairs of the companies
should be made to: The Official Receiver, Public Interest Unit, 2
nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN.
Tel: 0161 234 8531 Email: piu.north@insolvency.gsi.gov.uk
4 Media enquiries should be directed to: -
Denise Rawls
Press Office Manager 020 7634 6910
Ade Daramy Press Officer
020 7596 6187
Contacts:
Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk
Denise Rawls.
Phone: 020 7674 6910
denise.rawls@insolvency.gsi.gov.uk