Inside Track was a British property investment information company[1] that went into administration in April 2008 following a downturn in the UK property market. Its sister company, Instant Access Properties, which sold properties to Inside Track clients, entered administration in September 2008, primarily as a result of the global economic crisis.
The company advertised in newspapers and through mailshots, inviting customers to attend a free property investment session. The purpose of the session was to sell a full two-day investment course, priced at £2,500.
If the customers proceeded beyond this stage, they would pay up to £8,000 to join 'Instant Access Properties', a 'property club' sister company of Inside Track, which sent property brochures for potential buy-to-let properties. These were typically off-plan properties, with the stated aim of achieving price appreciation before the property had been built, and with a view to holding the property on a medium or even long-term basis. Inside Track received a portion of the purchase price for this service, 3% if purchased through its sister company Inside Access Properties. Properties bought through the Instant Access company were sold at a nominal 15% discount (in order to access buy-to-let mortgages, which typically required a minimum 85% loan-to-value ratio).
With house price growth mostly over 10% each year continuing until 2007, many Inside Track customers did indeed make substantial profits, however with the UK property market in freefall as of 2008, the company was doomed, and it went into administration in April 2008; the company's website [1], which previously had advertised property seminars running almost every day and promoted its advice the UK buy-to-let market.
The main other company in the Inside Track family is Fuel,[2] a mortgage brokers, through which customers can arrange finance for their Inside Track property purchases. As of October 2008, it was still trading.
Inside Track's methodology was based on gearing, with customers encouraged to borrow against properties in order to buy more, a methodology that broke down as when the property market began to fall dramatically.
Contents |
The company was set up by Jim Moore.
He was a founder and international sales development director of L'Arome, a multi-level marketing (pyramid selling) company dealing in perfume in 1987. The company grew quickly, selling perfumes known as 'Echoes', because they were designed to echo, or copy, the smell of established brands. This behaviour attracted attention from Chanel, who successfully filed suit against the company on the basis of a little known (now defunct) piece of 1938 trademark legislation, saying that L'Arome had 'illegally used their trademark in an advertisement'. Chanel were arguably fortunate to 'get home' with this suit as it relied upon the fact that buried in one of the company's sales training manuals was the word 'Chanel'. on the same basis Porsche could have sued Mazda, (or vice versa) Canon could have sued Xerox, and so could anyone who's competitor ever used their name in training materials. This mischief was quickly identified and the legislation was repealed some 18 months later.
The lost suit caused L'Arome to collapse in 1991, owing £6.5 million. As L'Arome had a state of the art 'JIT' computerised ordering system, fortunately for its 180,000 distributors, they weren't left with masses of unsold product. L'Arome however, were, in total some £17,000,000 pounds worth between its warehouses in Rock Hill South Carolina and Deeside, UK.
The company reformed, with new directors and shareholders, and £2 million of capital from 'Schroder Ventures' and Peter Cookson (buyout specialist famous for the 'Timpsons' management buyout) but entered liquidation once again in 1993, when Schroders called their investment.
Moore said that he was 'broke, massively in debt' due to the failure after reinvesting much of his own saving in efforts to save the business.
Inside Track was set up in 2000, claiming to fill a gap in the market as advisor to individual investors in the buy-to-let property market, given that institutional investors had larger 'consultancy' type companies such as 'Savills', while consumers dealt only with estate agents, who act on behalf of the seller, not the buyer.
The company grew quickly, spending heavily on direct mail, and making to year end April 30, 2006, profits of £10.9m on turnover of £44.8m. To year end March 31, 2007, 25,265 people attended its free seminars, and 3,834 signed up the paid-for seminars.
A professional management team was recruited to manage the day to day affairs of the business, and a Vice Chairman, Brad Rosser, (Ex Virgin Group & McKinsey consulting) recruited. The business was marketed by Ernst & Young throughout 2006/7 and a bid in the region of £80M slipped away due to the onset of the credit crunch.
Once the UK property market began to crash, and sentiment turned against property, Inside Track, the property seminar company was no longer viable, and it went into administration in April 2008. The sister property sales firm, Instant Access Properties, went into administration in September 2008,with Moore's family holdings being the largest creditor.[3] leaving 4500 exchanges incomplete.
Moore, the company's original founder, subsequently, injected substantial personal funding to support these 4500 clients through to completion using a new company, IAP Global Limited, retaining the ex managing Director of Chestertons estate agents, Anthony McKay (a chartered accountant) to manage the day to day affairs of the business.
He quickly added the services of well known 'consumer champion' Louisa Fletcher (News of the World & ITN) in order to ensure that clients got good advice and guidance on an 'independent basis'
In 2010 IAP Global went into liquidation owing almost £2m to investors.
So could this finally be the end for Moore, 49, described as having "unnaturally white" teeth and living in Geneva for tax reasons?
From time to time, Inside Track attracted some negative publicity for its aggressive marketing methods in the British press.
In spite of this Inside Track were the first company of its type to actually lobby FSA for regulation of the industry, a request which unfortunately went unheeded as many less scrupulous companies attempting to replicate all or part of their business model (Turning Point & Portfolio Building Services, to name just two) collapsed leaving members of the public with massive debts.
The company's seminar and sales methods were criticised in an article in The Guardian, with attendees saying that the £2,500 seminar was mainly concerned with promoting other Inside Track services and companies, and encouraging them to sign up to their membership service.McKay commented that 'The Guardian' and levine who wrote the article had been invited to the companys seminars and offices on numerous occasions but declined the offer.
Inside Track were awarded 3 'Investment Specialist' awards by 'Business Britain' magazine.
Due to a sharp decline in UK property market sentiment in the wake of the credit crunch, Inside Track Seminars Ltd., which runs the seminars, went into administration in April 2008.