Legal products company which took £400K from clients in return for very little is wound up in the public interest (UK)

Goldstar Law Limited, a Nottinghamshire company which sold legal products meant to protect clients’ assets through wills, trusts and lasting powers of attorney, has been wound up in the High Court for failing to provide the services it claimed it could.

The winding up follows an investigation by the Insolvency Service.

The court heard that the company approached prospective clients by cold calling, followed by a home visit conducted by one of its sales staff.

The company received some £400,000 in the form of advance payments made by clients, but had provided very little in return.

Clients were required to pay in full and in advance for the legal products, the price of which ranged from £95 for a single will to £3,834 for a package of wills, trusts and lasting powers of attorney. The company informed clients that they would receive their legal products within 3 to 8 weeks.

Commenting on the case, Colin Cronin, an Investigation Supervisor with the Insolvency Service, said,

“Goldstar Law limited used forceful and misleading sales practices to obtain upfront fees, from a predominantly elderly clientele, for legal products which it then failed to deliver.

“The Insolvency Service will take firm action against companies which operate in this manner.”

The investigation found that, as at 22 October 2013, some 15 months after the company started operating, it had failed to provide legal products to the overwhelming majority of its customers and that there was no realistic prospect of the position improving.

Despite having taken instructions and payment from 132 clients, it had finalised just 5 wills, 11 lasting powers of attorney and 4 estate preservation trusts. From the outset of its trading, the company had accepted clients even though it had no firm arrangements in place to produce and register the legal products.

The court also heard that the company operated with a lack of commercial probity in that it had sold ‘estate preservation trusts’ claiming these would enable clients to avoid their assets being used to pay for care home fees, without properly informing customers of the risk of local authorities challenging these arrangements.

Click here to see the complete news release.

Attribution:

Legal products company which took £400K from clients in return for very little is wound up in the public interest
The Insolvency Service
August 4, 2014
Gov.UK
https://www.gov.uk/government/news/legal-products-company-which-took-400k-from-clients-in-return-for-very-little-is-wound-up-in-the-public-interest

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