Publisher wound up for alleged misconduct

A company which made misleading claims to more than 2,000 customers, and demanded payment for services it never provided, has been wound up in the High Court following an investigation by the Insolvency Service.

Manchester-based Costello Limited sold advertising space in publications and on websites claiming to promote road safety and crime prevention.

The enquiry, by the Insolvency Service’s Companies Investigation Branch (CIB), found the company earned more than £600,000 between February 2008 and July 2009 from cold-calling potential advertisers, usually small businesses, and offering them advertising space based on misleading representations.

Alleged misconduct included the issuing invoices when it knew its services were not wanted, refusing to allow customers to cancel adverts and falsely claiming that donations would be made to charity.

The enquiry also found that there was little or no of commercial benefit to customers from placing adverts in the publications and that there was no evidence to support claimed distribution figures.

CIB investigations supervisor Alex Deane said: “This case serves as another reminder to businesses to be wary of anyone who cold-calls asking potential customers to place advertisements in wall-planners, diaries, children’s fun books and similar publications.

“Anyone who has any doubts or feels that they are being intimidated into paying for such unsolicited or unwanted advertising should consult the Insolvency Service website and follow the link to Companies Investigation Branch where there are more details concerning this type of publishing scam.”