False advertising leads to shutdown of magazine company
A Chester-based company which made false and misleading statements to induce businesses to place magazine advertisements has been wound up in the High Court.
The closure of Ginavo Media Ltd, publishers of ‘The BlueLIne’, follows an investigation by the Insolvency Service.
The quarterly magazine was purported to be aimed at sharing police initiatives across police authorities. It was distributed free of charge and was funded by the sale of advertising space to small businesses. The investigation found that the company’s telesales staff made false and misleading claims when soliciting advertisements including:
- implying or stating that they were calling from or on behalf of the Police
- implying or stating that funds raised from advertisers would be used for Police campaigns on issues such as crime prevention or would go to Police charities
- stating that the magazine would be nationally distributed when the print run for each edition was in fact just 250, the majority of which (typically 224 copies) would be sent to the advertisers in the particular edition
- stating that numerous businesses had agreed to advertise, or had agreed to multiple advertisements, when no such agreement had been reached.
Enquiries made of those Police authorities which had received copies of the magazine established that it was of no use to them whatsoever and was immediately consigned to the recycling bin.
Financial statements filed by the company showed it to have received an average yearly income of £400,000 from the sale of advertisements.
Commenting on the case, Colin Cronin, Investigation Supervisor with the Insolvency Service, said,
The magazine published by Ginavo Media Ltd served no useful purpose to either the Police or the advertisers. It was simply a device by which the company preyed on the altruistic nature of genuine businesses by falsely representing that monies raised by way of advertisements would be applied to the benefit of Police initiatives. Instead the overwhelming majority of funds raised were paid directly to the company’s directors and telesales staff and just one charitable donation of £500 was evident from the company’s accounts.
I would urge any business which is contacted by cold-call and asked to support the emergency services in this way to make full enquiries into the service being offered before agreeing to advertise.
Notes to Editors
Ginavo Media Ltd – company registration number 07091411 - was incorporated on 01 December 2009. The company’s registered office is at 125-127 Richmond Place, Boughton, Chester, Cheshire CH3 5BH.
The petition to wind-up Ginavo Media Ltd was presented under s124A of the Insolvency Act 1986 on 21 September 2016. The company was wound up on 15 November 2016 and the Official Receiver has been appointed as liquidator.
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Published: 30 November 2016
From: The Insolvency Service