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Company Offering Free Holidays Wound Up

Press Release: Department of Trade and Industry
December 31,004
LONDON -- A travel promotions company which offered free holidays to thousands of customers has been wound up following a DTI investigation.

ECHO BEACH VACATIONS Limited, based in Sheffield, offered one week's free accommodation and travel, often as an inducement to attend marketing seminars for holiday clubs.

The company requested an administration fee of 34.50 per person. Customers could then opt for the 'gold service', which entitled them to a once only offer of free flight and accommodation, with the company specifying the date of departure.

Alternatively they could choose the 'silver service' whereby the customer could choose the date of departure and airport but only receive free accommodation.

The DTI's Companies Investigations Branch found that customers had been misled. Although 94% of customers opted for the gold service and paid their administration fee, the acceptance rate of the holidays they were then offered was under 4%.

The low take-up was usually because customer preferences regarding dates, departure airports and destinations were not taken into account. For example, although people were asked to specify their preference out of a choice of four airports - Gatwick, Manchester, Glasgow and Birmingham - the only departure airports offered were Gatwick and Manchester even though 45% had specified Glasgow. Even some of those who had specified Manchester as a departure airport were offered Gatwick.

All customers were offered the destination of Malaga, even though they were asked to state a preference, which included Spain, Greece, the Canaries, the Balearics and Portugal. In addition customers were required to pay a further 39 per person to cover insurance and airport taxes.

Consumer Minister Gerry Sutcliffe said:

"If you come across a company supposedly handing out free holidays, it is wise to approach it with a healthy degree of scepticism. It is a fairly safe bet that if you are offered something for free, there will be a hidden way for the company to get their money back.

"Such underhand tactics won't escape the notice of DTI investigators, and yet again they have moved swiftly to put a disreputable operation out of business."

Notes:

1. The Winding Up order was made on 15th December 2004.

2. The petition to wind up the company was presented on 29th October 2004 under section 124a of the Insolvency Act 1986 and followed investigations carried out by the Department's Companies Investigation Branch (CIB) under Section 447 of the Companies Act 1985.

3. The registered office and trading address of Echo Beach Vacations Ltd is at Globe Works, Penistone Road, Sheffield S6 3AE.

4. All public enquiries concerning the affairs of Echo Beach Vacations Ltd should be made to the Official Receiver at:

The Insolvency Service
Public Interest Unit North
PO Box 326
Boulton House
17 - 21 Chorlton Street
Manchester
M60 3ZZ
Telephone 0161 934 4182

Department of Trade and Industry
7th Floor
1 Victoria Street
London SW1H 0ET

Public Enquiries +44 (0)20 7215 5000
Textphone +44 (0)20 7215 6740
(for those with hearing impairment)
www.dti.gov.uk