Aggressive practices and misleading claims led to prison sentences
A case law update on the fraud case against Corporate Energy Support Solutions Ltd and associated companies, Utility Advice Centre and Utility Bill Saver. Reported by the East Midlands Business link.
What was the case about?
Between 2011 and 2015 the companies and their directors made claims to small businesses and consumers that they could get refunds from UK energy suppliers for them and carry out various services, including:
- refunds of overpayments
- VAT overcharge refunds
- refunds of commission payments
- renewal of energy supply contracts
- transfer of energy supply contracts
Fees of between £300 and £400 were paid in advance, with customers hoping for refunds but in fact the overcharges never actually existed.
National Trading Standards (NTS) allocated the case to the East Midlands Regional Investigation Team, hosted by Nottinghamshire County Council, in 2014.
What did the court decide?
In addition to those covering fraudulent promises to recover refunds for overpayments that didn’t exist, charges were also laid relating to fraudulent trading, by submitting applications for VAT refunds:
- without knowledge or consent of customers
- without agreeing levels of charge or commission
- with forged or digitally altered and manipulated documentation.
Unwarranted, intimidating, aggressive and persistent demands for commission payments also formed the basis of some alleged offences. Finally, charges were also brought for conspiracy to commit fraud by submitting false recordings or verbal agreements with customers, claiming to authorise access to their energy account details or act on their behalf in renewal negotiations.
The court found all five of the director defendants guilty. Sentences of a combined total of 13 years in prison were passed, which the court said reflected that there was a total detriment of around £1.6m based on the nationwide 770 complaints known about.
What does this mean for advisers?
Some of the complaints this investigation was based on, came from the consumer service database, illustrating the importance of the adviser role to refer potential criminal breaches to trading standards alongside giving individual civil advice.
Where there is a regional team that can investigate, as here, the relevant details will be passed on or picked up. There is no guarantee that any of the victims will be able to recover any of the money paid over with cases like these. Sometimes the courts will make compensation orders. In this case, investigators have confirmed they will be conducting a proceeds of crime investigation and any money recovered will go to recompense victims.
Small businesses are just as at risk as individual consumers, especially when it comes to scams, and some activities are obviously tailored and targeted towards them. Cold calling by telephone, as happened in this case, is a very common way of contacting people to try and scam them and people should be on their guard. That old saying comes to mind “if it sounds too good to be true it probably is”. Not taking the word of a cold caller is always sound advice. Clients should check with their supplier directly, whether it be an energy company, a bank, someone delivering something or anyone else offering goods or services. Some examples of small businesses experiences of dealing with the companies involved, are contained in the link above.
Our website has advice to help clients: if you were misled or pressured into buying something you didn’t want and check if something might be a scam.
And there’s two pages specifically aimed at small businesses and their energy supply: switching your small business to a new energy supplier and your small business can’t afford its energy bills.
Kate Hobson is a consumer expert in the Expert Advice Team at Citizens Advice
