Three associated firms in Manchester that wrongly claimed they could help companies reduce their business rates have been wound-up in the public interest at the High Court following investigations by the Insolvency Service.
J&S Surveyors Ltd, (J&S), David Scott Surveyors Ltd (DSS) and C&R Surveyors Ltd (C&R) - wound up on 6 August 2013 - made unsolicited calls to business operators claiming they could get business rates significantly reduced for a fee, but failed to deliver.
The three were run as successor companies. J&S was the first to be set up, but ceased trading in July 2011 at around the same time that DSS started to trade. DSS was abandoned around October 2011, when C&R started trading in its stead, before it too was later abandoned. Each of the three companies was controlled by the same two individuals and continued the same business model as its predecessor company.
Investigations found that that once a business owner agreed to make an appeal against their business rates, a cancellation fee was payable. However, clients said that the cancellation terms were not explained to them and they encountered difficulties in contacting the companies.
The investigation also found that:
The success rate of C&R was estimated at between 1 and 3 per cent and yet potential new clients were assured that a significant reduction could be achieved in every case.
Those behind the companies abandoned each one in turn, and did not take adequate steps to ensure that the interests of clients and creditors were safeguarded.
Clients were encouraged to sign a 15-year contract but the contracts were abandoned along with the companies when each ceased to trade, despite clients having paid between 495 and 1,295 for the service.
All three companies failed to maintain or preserve adequate accounting records, such that, with particular regard to J&S and DSS, it was impossible to adequately account for their income and expenditure.
Commenting on the case, Scott Crighton, Investigation Supervisor with the Insolvency Service, said:
Each of these companies misled clients, mostly proprietors of small businesses, into paying money through deception. Those in control continued these sales practices from one company to the next with little or no expectation of success and no apparent regard for the interests of those clients, who were systematically abandoned.
Those tempted to engage in such practices should be aware that the Insolvency Service will take firm and decisive action to protect the public.
Anyone who believes that their rating assessment for business rates is incorrect, can contact the Valuation Office Agency ( http://www.2010.voa.gov.uk/rli/ ) who will review it for them, free of charge.