NORTH-East companies who claim they have been victims of a telecoms fraud have begun legal action against a leasing company.

Six companies have joined together in a bid to cancel leases for telephone equipment and line rental obtained from One Cloud Solutions - a company which collapsed with debts of £900,000 and is now the subject of a police investigation.

They claim the leases with Warrington-based Academy Leasing were for equipment that was never supplied, was second-hand or was worth far less than the value of the contracts.

Solicitors acting for the North-East firms are arguing that the former director of One Cloud Solutions, Garry Moat, had business links with the director of Academy Leasing, Mike Nolan, meaning the leasing company would have known the value of the contracts did not reflect the value of the equipment.

One of the companies taking action is Morpeth Bathrooms, which signed up to an annual lease of £4,000 plus VAT for telecoms equipment and line rental.

As part of the agreement, the company was promised rebates of £75 a quarter from One Cloud's marketing fund.

However, the money was never paid and the company later discovered the equipment it had been given was worth far less than the lease value.

Mark Stocks, from the company, said: "We have recovered not one penny of any rebates and additionally the equipment One Cloud placed is not even remotely worth the amounts of rentals as they represented and as was proposed prior to our signing the lease."

In response, an Academy Leasing spokesman: “Academy Leasing is not aware of any class action or individual actions involving court proceedings or the threat of such proceedings against the company by former clients of One Cloud.”

The Northern Echo revealed last year how One Cloud Solutions has gone into liquidation with debts of around £900,000.

The creditors include Her Majesty's Revenue and Customs (HMRC) which is owed £700,000.

Northumbria Police's fraud unit have launched a major investigation into One Cloud, previously based at the Newburn Riverside Industrial Park, in Newcastle, and another company Sumlock Electronic (North East) Ltd, after receiving complaints through Action Fraud, the national reporting centre for fraud and internet crime.

Police have made several arrests, with Mr Moat among those who have been interviewed.

A spokesman for the force confirmed this week that enquiries were ongoing.