Senior citizens and their carers in the UK have been warned to be on the alert against scams involving health supplements, following the forced winding up of companies that made millions of euros by targeting the elderly.
The Insolvency Service, an executive agency sponsored by the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS) noted that two companies registered in the UK but allegedly run by two men in Goa, India, have been wound up in recent months.
Souza Healthcare Ltd, a London-based company that sold food supplements specifically targeting elderly and vulnerable consumers was wound up by the UK High Court following an investigation by the Insolvency Service in December 2016.
The investigation found that the company, whose director was Joel De Souza from Goa, India, raked in more than £2.8m (€3.3m) between May 2013 and September 2016 selling supplements priced between €15 and €39 per box to elderly people that were targeted by Indian call centres.
According to the Insolvency Service, the callers from centres in Goa and Mumbai told elderly people suffering from conditions including dementia and cerebral palsy that they were healthcare professionals in order to con them out of money for supplements. Some customers were found to have paid several hundreds of pounds in separate transactions spread over a number of years, it said.
Souza Healthcare also flouted European legislation on health claims during sales calls, where customers were falsely told that they would see a significant reduction if not eradication of pain, while others were told that supplements would cure or prevent serious conditions like dementia.
A long-standing problem?
Souza Healthcare is the latest in a string of ‘scam’ supplements companies to be closed by the UK courts after Insolvency Service investigations revealed unlawful practices. Just one month prior to the winding up of Souza another UK-based company, Elbon Wellbeing Ltd, was similarly shut-down after an investigation found it made false and misleading claims that persuaded elderly and vulnerable customers to purchase health supplements.
Elbon Wellbeing, whose director, Elvino De Souza of Goa, India, shared the same surname as Souza's director, made £3.7m (€4.25m) over six years after victims were repeatedly called after the company bought data lists of people over 65 with health issues and targeted them from a call centre in Goa.
The firm’s tactics were described by the Insolvency Service as “manipulative, pressured, misleading and wholly unfair.”
Indeed, Caroline Hooton, the daughter of a man who paid £300 (€353) for numerous tubes of a gel for painful joints said her father – who has dementia – had been sold so much that “he could never use it all in his lifetime.”
She was angry at the companies selling the supplements but also willing to selling data about vulnerable people.
“I think it’s atrocious that data companies can sell the information that allows people like my father to be targeted,” she told UK newspaper The Mirror . “They need to be taken to task too.”
The winding down of both Souza Healthcare and Elbon Wellbeing are part of a crackdown on companies flouting UK and European laws on the sale and marketing of health foods and supplements.
In 2014 a similar case, brought by Warwickshire County Council’s Trading Standards Service resulted in Sanda Wellbeing Ltd, which later changed its name to Natural Wellness Products before going into liquidation, being found guilty of four counts relating to supplements sold to an 89 year old man.
It was found that the man had paid £9,949 (€11,751) to the company for supplements that after independent testing turned out to be ‘useless’.
According to Warwickshire Trading Standards one product called Pomy – which claimed to give “all the goodness of pomegranate”, including “compounds rich in folic acid, vitamin A, B3, C and E” – was found to contain negligible quantities of some of these nutrients, with the vitamin C content less than 0.01% of the recommended daily allowance.
Furthermore, independent tests of the products showed that nutrients in some products sold to the man overlapped with others, and that if all were taken at the levels advised on-pack then it would have led to him exceeding recommended levels – including that of vitamin A, which can result in decreased bone density and hip fractures.
The Insolvency Service and Age UK said people who believe they have been scammed, or industry members and health professionals who may have spotted a scam company should contact Action Fraud on +44(0)300 123 2040 to report it.