Circle broken by CIB petitions

Circle broken by CIB petitions

MANCHESTER, UK: Two Cheshire based companies that offered to help owners dispose of valueless timeshare products and also marketed a potentially worthless cash back scheme have been wound up in the High Court following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB’s investigation found that Full Circle Management Ltd (which traded under the style of FC Management) targeted existing timeshare owners, who were invited to attend a presentation at which they were persuaded to pay the company a fee, in return for which they were promised they would be “rid of the [timeshare] problem once and for all”. Clients were also invited to participate in a cash back scheme through which they were offered the opportunity to earn back what they had lost on their timeshare investment. The cost of the combined options varied between £1,800 and £8,000 and the company signed up nearly 450 clients between September 2006 and March 2008, generating a turnover of more than £2m. However, the enquiry found that almost £1m of that sum had been diverted to a Gibraltan company under common ownership and could not be accounted for.

Furthermore, CIB’s investigation also established that the timeshare disposal contract was not legally binding on the timeshare management company who, in the event of default by Full Circle, would continue to look to the client for outstanding management fees; a fact that was not made known to the client by Full Circle. As at February 2008 the company had potential future annual management fees of more than £150,000 but less than £12,000 in its bank account.

Regarding the cash back scheme, the investigation established that Full Circle had received more than £280,000 as agents for the cash back providers (in addition to £95,000 in sales commission) but that, as at March 2008, had handed over only £107,000 of that sum. As a result, 51% of clients are prevented from pursuing their claim to cash back, having not received the required paperwork, whilst the potential of the scheme for the remaining clients cannot be assessed.

Recent information reveals that the company ceased to trade in July 2008, having been abandoned by its management team, who are ex-patriots living in Spain and who failed to co-operate fully with the investigation.

Full Circle’s sister company, FC Management Ltd, although dormant, was also wound up by the Court on the grounds that its name was identical to the trading style of Full Circle and could lead to confusion in the minds of the general public.

In winding the companies up the District Judge commented that Full Circle’s business model appears to be one that significantly disadvantages the public.