An Insolvency Service investigation into Express M S Limited, a Tyne & Wear company which acted as a debt collector, has led to the company being wound up in the High Court on 9 September for failing to provide the services it claimed it could.

The investigation found that the company claimed to be able to take recovery action against the directors of failed companies to enable creditors to recover their debts. The company charged annual fees ranging from 100 to 1,250 plus VAT and received over 665,000 in less than two years.

Commenting on the case, Alex Deane, an Investigation Supervisor with the Insolvency Service, said,

This company took substantial sums of money from businesses for services it did not provide. Those responsible should be aware that the Insolvency Service can and will take firm action against companies which operate in this manner.

The court heard that the company made misleading and unfounded statements and delivered services which provided little or no commercial benefit to clients. In particular the company:
claimed to be working with Insolvency Practitioners where in fact no such connections existed,
claimed to use sections of the Insolvency Act 1986 to recover debts when it was not appropriate to do so,
claimed to have door-step collectors working nationwide despite there being no such people employed by the company.

The lack of accounting records prevented the Investigators from obtaining a full explanation of the companys trading activities. However, the company was instructed to collect debts of at least 489,734, but only managed to collect a single debt of 1,586, which was not then remitted to the companys client. Unconnected clients received updates from the company which were substantially the same and gave rise to concerns as to whether the work referred to had in fact been undertaken.

The company offered some customers what turned out to be a worthless money-back guarantee as it did not make any provision to meet the guarantees and the investigation found the company to be insolvent.