Wescot Credit Services Ltd is no longer collecting money on behalf of troubled ISP Gio Internet.
The debt collection agency had sent out letters before Christmas demanding cash it said was owed to Gio Internet.
But the Hull-based firm was flooded with complaints from people who disputed the demands - some of which ran to hundreds of pounds.
One of those who received the bill told us: "We have recently been sent a bill for £319.80 from Wescot Credit Services Ltd saying we owe Gio Internet this money for the use of them providing us with the internet service.
"We have never heard of this company and have only ever used AOL for our internet service use, we have only been on the internet for about a year and Wescot is stating the bill is for internet service in 2002."
Another told us: "Having received this extortionate bill for £340 from a debt collection company on behalf of Gio I hit the roof. I tried to contact them but to no avail. I've been advised to contact them via email and to ignore any demands for payment since they may not be legitimate."
As a result of a "significant number of enquiries" and complaints like these, Wescot has now written another letter advising "that we have now returned all Gio Internet accounts back to our client and Wescot is no longer acting in respect of this matter".
However, it's emerged that Wescot wasn't acting on behalf of Gio directly, but cableco NTL, which is owed cash by Gio for wholesale dial-up services.
A spokesman for NTL confirmed that the cableco was working with Gio to reclaim the cash but declined to say how much money it is owed. This is on top of the £220,000 that NetServices Ltd claims it is owed by Gio for broadband services. Gio disputes this and the matter is currently in the hands of lawyers.
Part of the chaos concerning the involvement of Wescot appears to stem from incomplete records of customer accounts and billing transactions.
Gio Internet MD Charles Holland said he believes Gio is owed up to £1.3m. However, due to incomplete records there is no way of knowing - at the moment at least - exactly how much money is owed. ®