I know someone who fell prey to hill and hill. They asked for a small fee for copying etc as a one off payment, I think she said it was about twenty five pound. She got fortnightly updates about who it had been submitted to and the progress. After six months she even receieved word of an interested party who they were meant to get an answer from this publisher the day the agency vanished. She contacted the apparently interested party only to find they had never had anything.
They were quite convincing, they even wrote dust jacket synopsis.
She had looked into them and they had seemed legitimate, but she was new to the world of writing. Since it didn't seem a lot she was happy to pay it.
Sadly after this she hasn't written anything since.