A Stockport-based company that conned almost £900,000 from small businesses though “bogus” drug awareness campaigns for schools has been shut down by the courts.
The high court ordered Data Northern Limited to be wound up in the public interest this week, after a probe by the Insolvency Service found it had tricked its sponsors out of about £880,000.
The company, which was created in February 2010, produced awareness booklets called Are You on Drugs for schools, providing information about dealing with the effects of various substances.
On Monday, the court heard how the company would target small businesses and persuade them to sponsor drug awareness “campaigns” that were carried out in conjunction with schools.
These campaigns were supposed to see schools receive the booklets as an additional resource, and in return benefactors would receive a certificate of sponsorship. The most common sponsorship rate offered was £179 but amounts varied from £50 all the way up to £13,000.
According to the Insolvency Service, the majority of schools it contacted did not receive the booklets, while those that had been sent the materials felt they were of poor quality and did not use them.
They turned out to be authored by boss Ashley Thorley, 38, who had no formal training.
The agency also found Data Northern falsely told sponsors it was running a charity campaign in conjunction with schools, and lied that sponsors had agreed to a rolling programme of sponsorship by issuing multiple invoices.
Data Northern secured more than £880,000 from small business through “this type of bogus consent” between April 2015 and April 2018, the Insolvency Service said. This accounts for 80% of its total sponsorship over that period.
Additionally, Data Northern employed “aggressive and misleading debt collection techniques” like falsely threatening court action or claiming bailiffs had been instructed, and failed to keep adequate accounting records, the Insolvency Service said.
Data Northern was placed into provisional liquidation in November 2018.
Scott Crighton, chief investigator of the Insolvency Service, said: “Data Northern targeted small businesses and exploited their generous and benevolent nature, misleading them into believing they were contributing towards a worthy charitable cause.
“This couldn’t have been further from the truth as our investigations showed that the company was only generating revenue for itself.
“The strong actions of the court have prevented further loss to the business community and is a warning to other companies solicited in this way to exercise discretion before agreeing to purchase advertising space.”