THE OFFICE of Fair Trading has issued court proceedings against Keith Fryer, trading as Capital Funding, because it believes he has been misleading consumers about his ability to purchase their properties.

The action follows complaints from the National Association of Estate Agents, which says that a number of sellers have been affected.

The OFT claim has been issued in the High Court for an injunction against Fryer under the Enterprise Act 2002 and the Control of Misleading Advertisements Regulations 1988.

Fryer runs a property investment business, based in Manchester, which approaches estate agents for details of properties they are marketing.

If he considers one suitable he makes an offer to the agent and, if this is accepted, he writes directly to the seller requesting a ‘processing fee’ of £392, which he states will be refunded on completion.

However, the OFT believes that Fryer does not make it sufficiently clear to the estate agent or to the seller that his offer is dependent on him finding a sub-buyer at a higher price. Fryer has not provided any evidence to the OFT that the sale proceeds to completion, which means that the seller will not have sold his property and will also have lost £392.

Fryer claims he is not misleading estate agents or consumers and has refused to give undertakings to the OFT in the terms requested that he will not make offers for properties without making it absolutely clear that his offers depend upon him finding sub-buyers at a higher price.

No date has yet been fixed for the High Court hearing.

The figure of £392 was the sum also charged by Equity Options, also Manchester-based. In 2004, Equity was put into compulsory liquidation after an investigation by the Department of Trade and Industry.

The same sum was also charged by Unity Investments, which was wound up in April 2004. It was said to have taken processing fees from 172 vendors but completed only nine sales.

The director of both firms was called Keith Fryer.