Pair fined for running Green Deal business

Two men who misled consumers through a Cardiff-based green deal business have been fined at Cardiff Crown Court in a prosecution brought by Newport City Council and the National Trading Standards Scambusters Team of Wales.

On Friday 16th January 2015 AbdulMuhith was fined £15,000 and David Neil Clarke was fined £7,500 for unfair trading offences after Muhith pleaded guilty to 6 counts and Clarke to 3 counts.They were both ordered to pay £2,500 as a contribution towards the prosecution’s costs. Muhith was also ordered to pay £1,794 compensation to his victims and Clarke was ordered to pay £598.

Muhith (company director) and Clarke (head of operations) exploited the Government’s Green Deal scheme – an initiative to help make homes more energy efficient – to set up Becoming Green (UK) Ltd. The Trading Standards investigation found that the business coordinated visits to consumers in their own homes, which saw residents duped into paying £299 to become participants in the Green Deal scheme.

The investigation concentrated on a variety of allegations:

• engaging in an unfair consumer practice which was a misleading omission; that the customers were not told about the true financial arrangement of the contract which involved repayment and the repayment of interest and that customers were not given the correct notice of their right to cancel the agreement
• engaging in an unfair consumer practice which was a misleading action; that customers were given the impression that for a one-off payment of £299, energy saving work would be done to their house; customers were not told the reality, which was that the work if undertaken would be financed by a financial arrangement involving repayment and the payment of interest
• displaying a trust mark or equivalent without authorisation; as letters of the company carried logos – one for REAL and the other for NICEIC. Both are recognised trade bodies; REAL is the Renewable Energy Assurance Ltd, NICEIC is a nationally recognised electrical contractors’ trade body. Neither body had given permission to Becoming Green (UK) Ltd to use its logo.

There is clear evidence that sales staff employed by Becoming Green (UK) Ltd were provided with – at best – inadequate training and were given – again at best – scant information about the Green Deal Scheme which they were marketing.

The ages of the victims (between 64 and 78 years old) was emphasised by the prosecution, as was the fact that the defendants failed to explain properly the financial elements of the green deal to them, especially the fact that the financial obligations were passed to subsequent purchasers and could affect the future sale of their property. In his summing up, Judge David Wyn Morgan commented that the defendants were “singularly unimpressive” in the way the company was run. He also commented that they had carried out the company’s affairs with “negligence that bordered on dishonestly”.

Newport City Council Councillor Bob Poole, Cabinet Member for Licensing and Statutory Functions said:

“The Green Deal Scheme was put in place to help people make their homes more environmentally efficient. It is incredibly disappointing that this business approached its trading practices in such a poor manner. This business had misled customers and was the subject of hundreds of complaints to Trading Standards and it is to the credit of the National Trading Standards Scambusters Team of Wales that the matter was dealt with so robustly.”

Lord Toby Harris, Chair, National Trading Standards, said:

“I am delighted that the investigation by our Scambusters Team in Wales has led to these rulings. Becoming Green (UK) misled hundreds of vulnerable households through its poor practices and inadequate training which has potentially cost consumers an estimated £237,690.

“I urge everyone to think twice before agreeing to purchase products from salespeople in their own home – always check references and credentials before paying out any money and if you are in any doubt, contact your local trading standards department or the Citizens Advice consumer helpline.”

About the Green Deal scheme

The Green Deal Scheme was administered by the Department of Energy and Climate Change (DECC). The Green Deal Oversight and Registration Body (GD ORB) was created in order to establish and maintain a list of all contractors who were authorised to provide services under this scheme. In order to be accepted on to the list, contractors had to be examined and certified against set standards by recognised certification bodies. Becoming Green (UK) Ltd was not on that approved list of contractors

Under the Green Deal Scheme approved contractors offer householders the opportunity to have an energy survey of their house conducted. Such a survey might or might not identify works which, if undertaken, would (or should) result in savings in energy consumption. Such works might include, for example, the installation of double glazing, a new boiler, photo static roof cells or under floor heating. The energy survey would identify the cost of any such works and would identify the resulting savings in energy usage and expenditure. If the householder chose to undertake such works the cost had to be met by the householder. This was done by way of payments being added to the household’s future energy bills – the principle being that the amount added in this way to the bill should not exceed the amount that had been saved by the householder by virtue of whatever energy saving works had been carried out on the house.

Importantly, this financial arrangement also involved the householders having to pay interest. Also, the financial arrangement is attached to the house rather than the householder, so that if a householder were to sell their house, the obligation to make repayments and to pay interest (by way of amounts added to the energy bills), would be passed on to the new owner.

***ENDS***

For more information about this case contact the regional Scambusters office on 01633 210460.

For more general enquiries regarding the National Trading Standards Board please call 020 7025 7570 or e-mail nationaltradingstandards@grayling.com.