The High Court and UK government’s insolvency service has forced the closure of Continental Telecoms and Plus Save Ltd., following a string of complaints and the repeated failure of the companies to comply with Ofcom regulations.
The companies operated as fixed line and broadband providers and were both owned by Daniel Huxham. Continental first appeared in 2008 and then transferred its customers over to a new company, Plus Save, in 2010.
The insolvency service announcement said that the move came following an investigation which showed that the companies had deliberately misled the public and “conducted business with a lack of commercial probity.”
Huxham and other officers of the business also failed to co-operate with the investigation and there was no way to contact either him or the directors as the registered office remained empty.
The investigation found that the company gained customers by cold calling and especially preyed on the vulnerable, in particular the elderly, to persuade them to switch.
It was found that Continental obtained details and then transferred customer accounts from their current provider to themselves without permission. Representatives for the company misled customers into providing their bank details, and when they later received bills from Continental they were told that they would have to pay a substantial termination fee in order to close their new account.
The company also told customers that they were calling on behalf of BT and that their existing lines had already been transferred to them. Consumers did not receive any documentation concerning their account, neither were they informed of any cooling off period.
Customers were charged more than they had been led to believe they would be paying and termination or cancellation fees were “excessive”. Consumers who attempted to contact the company for any reason often had difficulty in reaching anyone.
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.”
The petitions to wind up the companies were presented to the insolvency service in June and made official on the 3rd of this month.
Ofcom investigated the telecoms firms after a number of complaints were made, after which the regulator 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.”
The watchdog then ordered Continental to comply with a number of measures which it had previously contravened but the outfit did nothing. Ofcom then imposed a fine of £50,000 which Continental failed to pay and Huxham set up Plus Save, moving all the Continental customers over to the new service, again, without permission.
However, this company was also investigated and the result today is that both companies have been forced to cease trading.