Five directors of SAS Fire & Security Systems Limited (SAS), a company which sold monitored burglar alarms have been disqualified from acting as directors for a total of 39 years for engaging in sales practices which breached consumer legislation and failing to rectify breaches in response to Trading Standards enforcement action.
The investigation by the Insolvency Service, leading to the disqualifications, follows the winding up on public interest grounds of SAS Fire & Security Systems Limited (SAS) by Companies Investigation, part of the Insolvency Service. The last of the five disqualifications followed a High Court trial in August.
Four of the directors had already given undertakings to the Secretary of State for Business, Innovation & Skills not to be directors for the duration of their bans without leave of the court:
Ludovic Black and David Diaz were disqualified from acting as directors for 9 years each, from 1 September (having given undertakings on the first day of the trial),
John Davies, disqualified for 12 years, from 11 October 2013 and,
Roger Waring for 3 years from 24 April 2013).
A further director, Gary McVey, was disqualified by Court Order for 6 years from 4 September 2014, following a four day trial in the High Court.
SAS had nearly 7,000 customers by the time it was wound up.
The Insolvency Service investigation found the company coerced consumers, into allowing a sales presentation to be made at the consumers home, through cold-call telephone calls, where false statements and inaccurate claims were made.. At the presentation, further false statements and inaccurate claims were made in order to induce customers to purchase a burglar alarm and monitoring and response service, charging between1,699 and 5,999. Payment was usually obtained from the consumer in full by SAS before expiration of the 7 day statutory cooling-off period. SAS failed to ensure that consumers were advised of their statutory cancellation rights.
SAS also failed to materially alter the way its business was conducted in response to enforcement action taken by North Lanarkshire Trading Standards and the Information Commissioners Office, and to advice given by Trading Standards offices. Messrs McVey, Diaz, Black and Davies, in defending the winding up petition, also gave undertakings to Court as to how SAS would act. SAS breached several of these undertakings.
Commenting on the disqualifications, Ken Beasley, Official Receiver for the Public Interest Unit (North) of The Insolvency Service stated,
Many of SASs customers were elderly or vulnerable. The sales tactics SAS employed exploited this. I would urge anyone who has been cold called by telephone to carefully consider whether the offer made is reasonable and or plausible.
I would also advise caution in allowing sales representatives to attend in your home and, if possible, to ensure a friend or relative is present.
The Insolvency Service will not hesitate to take action against directors who fail to adhere to the standards required of them and to remove irresponsible and culpable directors from operating with the benefit of limited liability in the business environment.
SAS sold its business to 4 connected companies, Central Intelligence Security Solutions Limited, Homeguard Fire & Security Limited, Skynet Security Systems Limited and UK Monitoring & Response Solutions Limited . The Insolvency Service has secured disqualifications against 8 directors of these companies for periods totalling 66 years.
This brings to a conclusion the investigation and administration of the liquidation of SAS. Unfortunately, there will be no dividend payable to unsecured creditors.