Two companies that
carried out business as providers of fixed telephone lines to
domestic customers were this month wound-up in the High Court
following an investigation by The Insolvency Service’s Company
Investigations team.
The investigation found that Continental Telecom Ltd
(‘Continental’) and Plus Save Ltd (‘Plus Save’), which were under
common ownership and management, by Mr Daniel Huxham:
conducted business with a lack of commercial probity,:misled the
public; and, officers of the company failed to co-operate with the
Investigation.;there was a lack of presence at the companies’
registered office, leaving no reliable means of contacting the
companies or their directors.
Continental began trading first in 2008, and then transferred its
customers to Plus Save in September 2010.
The investigation showed:
Continental rented telephone lines from BT and O-bit Telecom
Limited, which it then provided to customers. It obtained
customers through cold-calling targeting vulnerable members of the
public, particularly the elderly, in order to seek to persuade
them to transfer their telephone service from their existing
provider to Continental.
There were a number of complaints raised about the manner in
which Continental “sold” its services to the public, and regarding
the service it provided. In particular, complaints were made that:
Customers had been transferred to Continental without their
permission. Customers were persuaded (or misled) into giving their
bank details even though they had not agreed to transfer to
Continental. However, they were then billed by Continental, and
told that a substantial termination fee would have to be paid if
they cancelled.
Continental misled customers into believing that it was calling
on behalf of BT, or that their existing BT lines had already been
transferred to Continental.
Customers were not provided with contractual documentation, or
informed of their right to cancel within a “cooling off” period.
When customers sought to cancel within the usual cooling-off
period, Continental would not cancel or transfer the contract
without penalty.
Continental charged customers more than they had been led to
believe they would be charged, and charged excessive cancellation
or termination fees when customers sought to cancel their
contracts.
Customers have had difficulty in contacting Continental to
complain or seek to cancel their contract.
Welcoming the Court’s winding up judgment Company Investigations
Supervisor David Hill said:
“These companies set out solely to mislead the public. The
court’s decision to wind them up shows the seriousness with which
this type of dishonest customer service activity is viewed.”
Ends
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Notes to Editors
1. Continental Telecom Ltd was incorporated as a private limited
company in England and Wales on 15 February 2006. The registered
office of the company is at: 1 Putney Bridge Approach, London, SW6
3JD. The sole director of the company is Mr Daniel Huxham.
2. Plus Save Ltd was incorporated as a private limited company in
England and Wales on 10 August 2010. The registered office of the
company is at 2 nd Floor, 145 – 157 St John Street, London, EC1V
4PY. The directors of the company are Mr Daniel Huxham and Mr
Ashley Huxham.
3. The petitions to wind up the companies were presented on 23
June 2011 under the provisions of section 124A of the Insolvency
Act 1986. The companies were wound up on 3 August 2011.
4. The Official Receiver was appointed as provisional liquidator
of the companies on 23 June 2011 and liquidator of the companies
on 3 August 2011.
5. A number of complaints were made to OFCOM. As a result OFCOM
opened an investigation into Continental in February 2010. On 15
June 2010, OFCOM issued a Notification of Contraventions of
General Conditions 14.5, 24 and 13 under section 94 and 98 of the
Communications Act 2003 to Continental, in which it found
reasonable grounds to believe that ‘Continental’ had failed to
comply with rules concerning sales and marketing of fixed line
telephone services and rules concerning suspension/disconnection
of services for non-payment of bills.
OFCOM determined that Continental had contravened the General
Conditions in that it had failed to offer factual and accurate
information about its services and contracts, and misrepresented
the services it offered; it failed to ensure that customers fully
understood Continental’s contract terms and were sure that they
wanted to enter into a contract on those terms because it entered
customers into a verbal contract without their express consent to
transfer their telephone service to Continental; it failed to tell
customers of their right to cancel during the switchover period;
abused the trust of vulnerable customers, for example people who
are elderly or have special needs, or those whose first language
was not English; engaged in dishonest, misleading and/or deceptive
conduct by omitting relevant information relating to the terms and
conditions attached to the specific offer, and/or providing false
and/or misleading information which is likely to affect a
customer’s purchase decision; engaged in aggressive conduct by
coercing the customer and/or applying unacceptable pressure on a
customer to enter into a contract; cut customers off for alleged
non-payment of bills without giving them due warning.
OFCOM’s Notification of 15 June 2010 required Continental to
comply with the notified Conditions to the extent to which it
remained in contravention. Continental did not comply with the
Notification, and in October and November 2010, OFCOM issued
further Notifications to Continental, requiring it again to remedy
its contraventions, and also to supply information about its
turnover so that OFCOM could calculate the maximum level of the
fine it could impose (the fine that may be imposed is based on the
turnover of the company). Continental did not supply the required
financial information. On 15 December 2010, OFCOM imposed a fine
of £50,000 on Continental, the maximum fine available to it.
Continental failed to pay this fine.
Continental made no attempt to mend its ways after being notified
of OFCOM’s findings. Rather, Continental’s business appears to
have been moved to ‘Plus Save’ in September 2010 (i.e. after OFCOM
had issued Continental with the Notification), it appears
customers were either not informed or not properly informed, of
the changeover. Ofcom commenced an investigation into ’Plus Save’
in December 2010.
There have been fewer complaints raised about Plus Save to
Trading Standards however, this may be because customers are not
aware that they have been transferred to Plus Save or of the role
of Plus Save, or because customers had already complained in
relation to Continental.
6. 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. Company Investigations, part of The Insolvency Service,
carries out confidential enquiries on behalf of the Secretary of
State for Business, Innovation & Skills (“BIS”). Further
information about the work of The Insolvency Service is available
at: http://www.bis.gov.uk/insolvency
7. All public enquiries concerning the affairs of the company
should be made to: The Official Receiver, Public Interest Unit, 4
th Floor Zone C, 21 Bloomsbury Street, London, WC1B 3QW. 0207 637
1110 Email: piu.or@insolvency.gsi.gov.uk
8. Media enquiries should be directed to:
Ade Daramy, Press Officer on 020 7596 6187 ade.daramy@insolvency.gsi.gov.uk
Contacts:
Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk