Business information

Huge fines for 'BT' scam

A Hemel Hempstead telecoms company that pretended to be part of British Telecom to get new customers left court with a bill for £27,000.

The director of Lo-Rate, Lee Baines, was also hit with fines and costs totalling nearly £23,000 for allowing the scam, which saw businesses across the country charged up to £900 to cancel their accounts once they discovered their new supplier had no connection to BT.

The hefty fines, levied by Hemel Hempstead magistrates on Monday, come on the back of a £130,000 fine by Ofcom, the communications watchdog. The investigations by Hertfordshire Trading Standards and Ofcom looked at more than 800 complaints about Lo-Rate.

“Lo-Rate lied to businesses to get their custom, and then charged a fortune when its new customers quite rightly wanted to cancel,” said Keith Emsall, executive member with responsibility for trading standards.

“The company was deceitful and I hope the severity of the fines will be serve as a warning to others that trading standards and the courts will not tolerate such actions.

“This prosecution by trading standards also demonstrates our commitment to protecting businesses as well as consumers.”

The court heard six examples of businesses being called by Lo-Rate employees who claimed to be ringing from BT. The businesses switched their phone accounts but then asked to cancel when they established there was no link with BT. Lo-Rate charged a cancellation fee of between £195 and £900.

Lo-Rate was fined £24,000 for six counts of section 14 Trade Descriptions Act and ordered to pay £3,000 costs to trading standards. Baines, 26, of Hemleys Road, Kings Langley, was fined £20,000 for five Section 20 Trade Descriptions Act offences and made to pay around £2,800 costs.

Businesses that want advice or to make a complaint about the activities of another business can contact trading standards on 01727 813849.