UNITED KINGDOM—The Insolvency Service, an agency of the United Kingdom’s Department for Business, Innovation and Skills involved not least with overseeing bankruptcies and liquidations, has completed an investigation into a group of 27 companies it says perpetrated bogus “free trial” offers involving the selling of health supplements. The agency traced ownership of the firms to Clayton Douglass of Local Billing Solutions Ltd, in Malta.
“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,’ the agency claimed in a press announcement issued earlier this month. “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.”
Grounds for liquidating the companies included:
* The websites used by the companies misled customers into believing that the trial offer was risk free;
* 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.
The investigation revealed that between August 2009 and March 2010, just seven of the charged companies had turnover in excess of $19 million, all of which was processed through merchant accounts based in Germany.
“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,” the release continued. “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.”
The accused companies include:
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, 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, 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, Gillmap Limited, Fyso-UK Limited and H5-UK Limited.
Liquidation petitions were presented on June 21 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
Liquidation petitions were presented on June 22 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
Liquidation petitions against the following companies were presented on June 23 and on June 25 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 liquidate Fyso-UK Limited and H5-UK Limited were presented on July 13.
"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," commented Stephen Speed, chief executive of The Insolvency Service.
More information can be found here.
