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Misleading claims lead to High Court closure for magazine publisher

03 July 2012 13:30

Insolvency Service

A Liverpool-based company that sold business-to-business advertising space in a magazine has been wound up in the High Court following an investigation by Company Investigations (CI) of the Insolvency Service.

Abingdon House Limited used telesales agents to make unsolicited calls to businesses across the country to induce them to advertise in the magazine called ‘SafeGuard’. The magazine also contained articles relating to the police, fire and ambulance services and was distributed to doctors surgeries and emergency service stations.

The investigation found the telesales agents misled advertisers by claiming to be serving police officers. Agents further misled advertisers by inferring that a proportion of the cost of the advertisement would be used to support the emergency services. The company also exaggerated the number of magazines distributed and falsely stated that advertisers would be granted advertising exclusivity for their business type.

The magazine was also distributed in such a way as to be of little or no commercial value to the advertisers. The distribution was to a wide geographic area remote from the advertiser’s business location. The company manipulated its cancellation policy to prevent advertisers from getting out of the contract and used aggressive, misleading and inappropriate debt collection methods to persuade businesses to pay up. The investigation also uncovered that advertisers payment card details were not properly protected, leading to unauthorised transactions on their accounts.

The court heard that customers reported being called by someone claiming to be a police officer, or acting directly on behalf of the police force or a police charity, to raise support for various campaigns intended to raise awareness of, for example, drink driving or youth crime.

Other customers reported that they believed that they were paying for an annual advertisement when, in reality, it was for one quarterly edition only. The company’s turnover during the last three years of trading was approximately £4m and dividends paid to shareholders in the same period were approaching £600,000.

Commenting on the case, Investigator Scott Crighton said:

“In winding-up this company, the Court has sent a clear message that it is unacceptable to mislead businesses and to exploit their goodwill towards emergency services.

The Insolvency Service will seek to have such companies closed down”

Ends

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Notes to Editors

1. Abingdon House Limited was incorporated on 26 June 2006. Its current registered office is at Suite 7, Queens Dock Commercial centre, 67-83 Norfolk Street, Liverpool, L1 0BG. The director of the company has been Steven Richards.

2. The petition was presented on 13 December 2011 under s124A of the Insolvency act 1986. The company was compulsorily wound up by the court on 26 June 2012.

3. Company Investigations, part of the Insolvency Service, carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation & Skills (“BIS”).

4. 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 www.bis.gov.uk/insolvency

5. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531. Email: piu.north@insolvency.gsi.gov.uk

Media Enquiries should be directed to: Kathryn Montague, Media Relations Manager, on: 020 7674 6910 or Ade Daramy, Press Officer, on 020 7596 6187.

Ins12/Coms/056

Contact Information

Ade Daramy
Name
Ade Daramy
Job Title
Mr
Division
Insolvency Service
Phone
020 7596 6187
Fax
Mobile
Email
ade.daramy@insolvency.gsi.gov.uk