THE directors of a city telesales firm which was hit with the most complaints of any company in the UK have been struck off for a total of 25 years.
Berger & Co, which had offices in Howe Street and St Vincent Street, made up to 70,000 "cold calls" every month to businesses, offering advice and analysis on management and human resources.
The rogue company is thought to have duped hundreds of
firms out of more than £1 million before it was closed down following a trading standards investigation.
It lured businesses with the promise of a 21-day free review of their activities, but did not always make it clear that they would be billed up to £395 if the reports were not returned within three weeks.
Berger & Co dispatched around 1200 reports to businesses every week at its peak but was safe in the knowledge that scores of firms would fail to send them back in time.
Today, the DTI warned companies to be on their guard against cold callers after the men behind Berger & Co were disqualified from holding directorships for a total of 25 years.
The High Court heard earlier this month that Filip Peter Lademacher, of Howe Street, Edinburgh, was running a misleading scheme, and was responsible for a raft of business malpractice.
He was disqualified from acting as a director for 13 years, and at an earlier hearing had an order for £60,000 costs made against him.
Two other directors, Ian Armstrong, of Heriot Hill Terrace, Edinburgh, and David Stirrat, of Broughton Street, Edinburgh, have accepted disqualification undertakings of six years each.
The telesales firm had the dubious honour of once being the most complained-about company in the UK, with 796 complaints received by Trading Standards between August 1999 and December 2000. Demands for payment were often backed up by threats of litigation, usually in a county court far away from where the company in question was based.
In one case, a business in Manchester had proceedings issued in Guildford County Court, while another customer based in Poole had proceedings issued in York.
The scam was uncovered after Edinburgh City Council’s Trading Standards officers investigated a string of complaints against Berger & Co. They compiled a dossier of 850 complaints which was used as evidence in the High Court to close the firm down.
DTI investigations found that about 40 per cent of companies paid up, taking Berger & Co’s annual turnover to more than £1m. It discovered the company derived income not from genuine sales of its product, but from the operation of a devious scheme, relying on the fact that a significant number of businesses would be caught out and fail to return the report within 21 days.
Today, Consumer Minister Gerry Sutcliffe said: "The reports sent out by Berger & Co were virtually worthless, but the company knew that if they sent out thousands of reports and aggressively pursued payment, enough companies would pay up to make a tidy profit.
"What they didn’t bank on was the ability of DTI investigators to act swiftly and shut down this deception. This is an unusually long disqualification and should serve as a warning to others."
Although the majority of businesses that cold call companies offering goods and services are operating legitimately and within the law, the DTI warned companies to be on their guard.
Berger’s cold calls were often made to a junior employee without purchasing authority, with the initial pitch suggesting that the report was being offered for a free review without any commitment.
Council leader Donald Anderson today said: "I congratulate the DTI in taking this effective action which sends a clear message that rogue trading will not be tolerated in Edinburgh, Scotland or the UK."
The full article contains 647 words and appears in Edinburgh Evening News newspaper.
