Over 4,000 small UK builders have been conned out of a combined total of £1m by websites which claimed they could find them work.
In most cases the construction workmen paid a registration charge of £300 to websites claiming to provide a database of “trusted” firms to carry out domestic works but never provided any results.
The sites have now been shut down by the High Court following an investigation by the Company Investigations unit of the Insolvency Service.
The Building Trades Database Limited, Quality Build Services Limited, Coast 2 Coast Building Services Limited and MTB Sussex Limited traded between October 2008 and February 2011.
Salespeople working for the sites told the builders that members of the public could submit an enquiry to the company’s website detailing their work requirements to receive a recommendation for an approved builder or tradesman.
Tradesmen were persuaded by cold calling techniques to register as members on the websites operated by the companies in return for the payment of a fee which was usually between£200-£300 plus VAT.
In all nearly £1m was conned by the companies from around 4,000 tradesmen which was paid in commission fees to sales staff and payments to the company’s Directors.
Company Investigations Supervisor Chris Mayhew said: “The Building Trades Database Limited preyed on tradesmen to build up a database business built on seriously misleading and unfounded statements to persuade them to enroll for the purported service.”
“The business effectively migrated from one company to another and the continuing deceit on tradesmen unfortunate enough to have been contacted by these companies is perhaps best illustrated by the discovery that the telephone numbers for the positive testimonials about one of the companies, Coast 2 Coast Building Services Limited, purportedly from two tradesmen, matched those for two mobile telephones found at the company’s former trading address”.
In ordering the companies into liquidation Ms Registrar Barber said: “Each company made misleading and unfounded statements to tradesmen by a variety of methods including cold calling and on their websites in order to lure tradesmen into paying a membership fee.”
“Despite a vigorous investigation into the trading practices of each company, no or insufficient evidence was uncovered, still less was provided by the companies, that anyone who signed up received any work referrals at all or received any commercial benefit.”
Recipro sourced this article from Construction Enquirer.