Rogue Lancs firm wound-up over false debt calls

A LANCASHIRE company which “fraudulently and aggressively” demanded small business owners for non-existent debts has been wound-up in the public interest.

Moth Communications a Blackburn-based company run by directors Rachel Lowe and Thomas Moffet, was wound-up at the High Court, Manchester District Registry after an investigation by the Insolvency Service.

The Insolvency Service said business owners received cold-calls from Moth demanding payment for overdue online advertising fees that had not been incurred in the first place.

The demands, mostly made to small companies, included threats that county court judgments had been obtained in relation to the allegedly overdue invoices and that bailiffs would be sent to recover the debts.

One victim, a small business owner, received a telephone call demanding £4,953 for an Internet listing subscription and was told that payment would need to be made within an hour to avoid bailiffs attending and removing goods to this value.

The caller threatened that the debt would increase to £12,000 if bailiffs had to attend, but would be reduced to £3,700 if immediate payment was made. The business owner, concerned about the escalating costs, immediately paid £3,700 to the company.

Those who made payments later discovered that they had no liability for the debt demanded by the telephone caller and that no county court judgments had been entered against them.

When business owners challenged the telephone caller to send documentation evidencing the debt, the company provided falsified invoices which pre-dated the existence of the company and which contained terms and conditions downloaded and copied from a legitimate company’s website.

The investigation found that amounts in excess of £370,000 were received into the company’s bank account between December 2011 and October 2012, of which some £338,000 had been withdrawn in cash immediately after receipt.

No accounting records were provided to explain the company’s transactions.

The investigation also found that the company used a number of trading styles when demanding payment including: Business Directory; Business Directory Pages; Business Directory UK; UK Business Directory; No 1 Business Directory; In the Red Debt Collection; Door Step Collections.

Colin Cronin, investigation supervisor at the Insolvemcy Service said: “Moth Communications  fraudulently and aggressively demanded payment from small businesses for debts that never were.

“The threatening telephone calls made by those acting for the company meant that hard-working business owners felt they had to pay off the debts or be visited by bailiffs. The Insolvency Service will take firm action against companies and their directors who operate in this way.

“I would urge any small business owners who encounter similar tactics to require the caller to provide full documentation evidencing the debt being claimed and to seek immediate advice if not satisfied that the debt is genuine.”