The Online Business Index Limited (OBI) contacted thousands of
businesses in London and Manchester by mail shot, inviting them to
add their details to its internet directory.
OBI gave the impression that its service was free – but then
invoiced customers the sum of £845 plus VAT per year over a minimum
two-year term, and used debt collection agencies to pursue those
customers that refused to pay.
The company used London accommodation addresses but operated
mainly from Germany. It attracted nearly 500 customers following
its first mail shot campaign of 50,000 London-based businesses.
The Advertising Standards Agency investigated the company after
receiving complaints over the adverts, and although it found that
the mail shot was misleading, OBI continued to send out the
ads.
The matter was referred on to the Department of Trade and
Industry (DTI) and an investigation launched. On 21st November last
year the DTI presented a petition to wind up OBI to the High
Court.
This was granted and the Official Receiver has been appointed
the liquidator of the company and will be responsible for
investigating the circumstances of the company's failure and the
conduct of its officers.
The court heard that OBI and its director, Herbert Kerler, did
maintain an internet business directory, but never sought to
promote and advertise the web site beyond the targeted customer
base.
