Midlands-based web dealer First Contact Mobiles has been wound up in the High Court owing more than £250,000 in unpaid cashback, following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.
First Contact Mobiles was running cashback deals online at a loss to the company. It failed to pay its liabilities or keep track of its debt.
The CIB said First Contact Mobiles was relying on commission payments from new connections to offset existing cashback debt.
The CIB said many First Contact Mobiles customers had entered into multiple contracts or had agreed to a monthly tariff that was inappropriate to their needs.
The dealership ceased to trade in December 2007 and was abandoned by its directors.
It failed to maintain adequate accounting records or to account properly for VAT. It had also failed to observe a voluntary industry code of practice for mis-selling introduced by Ofcom in July 2007.