Just what the Court Ordered: investigation brings an end to activities of ‘health supplement’ company
Wellness 2020 Ltd, a Middlesex-based company which made false and misleading claims in persuading the elderly and vulnerable to purchase health supplements, has been wound up in the High Court.
The company, which traded under the name ‘Vitabeing’, was wound up on 22 February 2016 following an investigation by the Insolvency Service.
The company purchased data lists from third party suppliers containing details of UK-based individuals over the age of 65 with restricted mobility. The company used a call centre in Goa, India, to make unsolicited calls to the individuals on these data lists to sell them a range of health supplements.
The investigation found that the company’s customers, many of whom were suffering from severe medical conditions such as acute arthritis, osteoporosis or dementia, were subjected to lengthy telesales calls in which the callers gave the impression they were healthcare professionals who were promoting a local healthcare campaign.
After customers had agreed with the telesales caller to purchase supplements, typically at a price of £15 per box, they were transferred to a supervisor at the call centre who would inform them that it was necessary to take a ‘course’ of supplements. Many customers were then charged several thousand pounds, including one customer who paid £5,154 for 223 boxes of supplements over a 4 month period. Some customers were sold so many supplements that the products were beyond their expiry date before completion of the ‘course’.
Customers were falsely told that they would see a significant reduction in pain levels and improvements to their health, of up to 85%, by the end of the ‘course’.
In one instance, a customer was sold health supplements for his dog even though the product was for human consumption.
The company made unauthorised deductions from customers’ bank accounts by charging for more supplements than had been ordered, or processing additional orders without customer consent.
The company also operated in breach of consumer protection legislation by failing to disclose the commercial nature of the call at the beginning of the telesales call and by failing to disclose the customers’ statutory cancellation rights.
Commenting on the case, Colin Cronin, Investigation Supervisor with the Insolvency Service, said,
Wellness 2020 Ltd caused considerable distress to elderly and vulnerable people, using highly manipulative and misleading sales techniques to sell large quantities of overpriced supplements. The company’s sales representatives made claims about the health benefits and pain reduction qualities of the health supplements which had no medical basis and implied they had medical experience when they had absolutely none.
These winding-up proceedings show that The Insolvency Service will take firm action against companies which systematically mislead the public in this way.
Notes to editors
Wellness 2020 Ltd – company registration number 07761331 - was incorporated on 5 September 2011. The company’s registered office is at 8 St Cuthberts Gardens, Pinner, Middlesex HA5 4JE. The company traded from 100 Greystoke Drive, Ruislip, Middlesex, HA4 7YW.
The petition to wind-up Wellness 2020 Ltd was presented under s124A of the Insolvency Act 1986 on 18 August 2015. The company was wound up on 22 February 2016 and the Official Receiver has been appointed as liquidator.
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Published: 1 March 2016
From: The Insolvency Service