Publishing scam targeted small firms |
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| Sales and Marketing - News | |
| Thursday, 29 November 2007 | |
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The Insolvency Service has closed down a Manchester publishing company that fraudulently obtained hundreds of thousands of pounds from small firms. A winding-up order was made on 2 November 2007 against Activated Promotions Limited after the secretary of state for business, enterprise and regulatory reform (BERR) presented a petition in the High Court. A provisional liquidator had been appointed on 13 September to administer the company's affairs pending the hearing of the petition. Activated, based in Manchester, carried on a business of the type that has become known as ‘support publishing’. This involved employees cold-calling businesses throughout the UK, asking them to sponsor business-to-business social awareness journals. It received in excess of £645,000 from advertisers between 14 March 2005 and 18 May 2007. Despite a lack of co-operation from the company's officers, an enquiry by Companies Investigation Branch (CIB) found that the company targeted small businesses soliciting sponsorship for five journals, only one of which was ever produced. Its sales staff then used inappropriate debt collection methods including threatening the small businesses concerned with registration of a bad debt against them. The threat to a small business of an adverse credit rating was, in some cases, sufficient to induce payment. The enquiry also found that the sole publication which was produced was of very poor quality and was distributed only to those who advertised in it with no regard to geographical location. The advertisers, usually small local businesses, were geographically spread from Leicestershire to Devon. This meant that it produced little or no commercial benefit to the advertisers. Related links Comments (0)
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