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Dept of Trade and Industry

Answer

Mr. Sheerman: To ask the Secretary of State for Trade and Industry what measures are in place to protect consumers from phoenix companies. [216868] Mr. Sutcliffe: The information requested is as follows: Measures in place to protect consumers: Disqualification: Courts can disqualify directors from between two to 15 years if they are unfit. "Phoenix" companies are particularly targeted and the courts take such cases very seriously. But hard evidence is needed in all cases. Over 1,000 directors were disqualified in the period April 2004 to February 2005. Over 850 of these disqualifications involved directors offering an undertaking not to act as a director under the recently introduced (2001) new fast track process. It avoids the need for a court hearing where the director consents to a period of disqualification. The Enforcement "Hotline" was established in January 1998 to enable the public to report possible criminal activities by those who manage companies while disqualified. In the period April 2004 to February 2005, 152 calls were received by the Hotline, 82 of which were referred for investigation. Prosecution: Directors can be and are prosecuted for offences relating to "phoenix" operations and on conviction they can, additionally, be disqualified from being directors.

Secondary information

Type

Written question

Reference

432 c823W; 216868

Session

2004-05

Subjects

Consumers Companies Directors Disqualification Insolvency Protection Prosecutions Telephone services

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk