Online Small Business Directory Shut Down by Court
At Manchester High Court on 26th February 2019 OBD Ltd was liquidated in the public interest before District Judge Khan. The Official Receiver has been appointed liquidator of the companies.
OBD Ltd was the limited company that operated as www.theobd.co.uk, an online directory for small businesses that listed their customer’s website. The company targeted small businesses with their own website and used keywords to further improve their clients’ internet rankings.
Having started trading in 2012, OBD Ltd built around 3,500 clients by cold calling small businesses before charging them between £50 and £250 a year for registration. The contracts were for one or two years and renewed automatically if the client did not cancel.
However, the Insolvency Service carried out confidential inquiries after customers complained of being sued for debts they did not think they owed.
Investigators found that the company used deceptive methods to persuade customers to sign up for its services, including stating or implying that OBD Ltd represented or was connected to an international web browser.
OBD Ltd failed to provide contract documents to customers, in some cases used ambiguous contract terminology and made it difficult for customers to get out of slippery contracts, while using coercive and intimidating debt collection methods.
In addition to these grounds on which the Secretary of State requested the liquidation of the business, investigators have demonstrated that OBD Ltd failed to provide the services paid for by customers in a timely manner and, in some cases, not at all, was negligent in issuing renewal invoices, issued erroneous invoices and collected payment without authorization.
Investigators established that turnover from February 2012 to April 2018 was £713,000, but investigations were further hampered as OBD Ltd failed to keep adequate accounting records or file statutory documents.
Scott Crighton, Insolvency Service Chief Investigator, said:
Small businesses use online directories in the genuine hope of getting more work. However, OBD Ltd took advantage of its customers and often used intimidation tactics to obtain money for inadequate services.
We welcome the court’s decision to shut down OBD Ltd, preventing anyone from harming themselves, and I would urge any business called out of the blue to sign up for a similar service to do their homework before entering into a deal.
All public inquiries regarding company business should be addressed to: The Official Receiver, Public Interest Unit, 2 Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Email: [email protected]
notes to editors
OBD Ltd (CRO07936953) – incorporated on 06/02/2012
The petition was brought under Section 124A of the Insolvency Act 1986 on October 15, 2018.
Companies Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to carry out confidential inquiries into the activities of direct limited liability companies in the UK on behalf of the Secretary of State for Business, Energy and Industrial Strategy (BEIS) . More information on live company surveys can be found here.
Further information on the work of the insolvency service and on how to file a complaint for financial misconduct can be found here.
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