Companies are wound up after ‘cheating’ firms
12:05pm Friday 12th March 2010 in News
THREE Bolton companies which used misleading sales practices to solicit sponsorship from businesses have been wound up in the High Court.
Fairchild Publications Ltd, Hogan-Reynolds Publications Ltd and Smithson Publications Ltd produced booklets covering child safety issues.
They solicited sponsorship for the booklets, typically charging £200 for 30 booklets, which were then sent to schools.
But the schools did not request the booklets and did not know in advance they would be receiving them, the High Court was told.
The companies operated under the control of the Fearn family —Susan Fearn, Wayne Fearn, Gareth Fearn and Eddie Fearn.
They used a host of misleading sales practices to obtain payment from sponsors, including deceiving businesses into believing they had previously agreed to sponsor booklets; saying that the booklets were of benefit to schools when they were compiled from information freely available on the internet; and representing that they were acting for a charitable purpose when, in reality, they were private companies operating for profit.
The misleading sales practices were compounded by aggressive and persistent debt collection tactics causing numerous businesses to pay for sponsorship that they had not agreed to, the court heard.
Fairchild Publications Ltd had received payments from sponsors of at least £636,000 and Hogan-Reynolds Publications Ltd received payments of at least £107,000.
Little of this money was spent on the booklets and instead it was used to fund payments to those in control of the companies and their telesales staff, with the companies adopting wage payment methods which facilitated tax evasion, such as the systematic use of cheque cashing services and the use of false employee names to withdraw cash from the companies.
Fairchild Publications Ltd and Hogan-Reynolds Publications Ltd ceased trading during the investigation and were succeeded by Smithson Publications Ltd, which was based in Manor Street, Bolton, and promoted to continue the same business.
Following the judgement, Department for Business Minister, Ian Lucas, said: “We hope that the action we have taken sends a clear message that we are determined to crack down on such companies and will not allow them to get away with cheating honest businesses.”
