Business information

Wake-up call for alarm company

A Watford company that sold domestic alarm systems was prosecuted by Hertfordshire Trading Standards when they failed to deliver the required cancellation notice to a customer.

Alarms UK (Residential) Ltd and its only director Malcolm Kelsey, 53, were convicted at St Albans Magistrates' Court on Friday, October 5 after pleading not guilty to offences under the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987.

The company was fined £1,500 and ordered to pay £1,000 costs. Kelsey was fined £500 and ordered to pay £350 costs for causing the company to commit the offence by his neglect.

“This sends a strong message to businesses that they need to get their paperwork in order," said County Councillor Richard Smith, Executive Member for Community Safety and Culture.

"Consumers are entitled to the full protection of the law when sales people visit them uninvited in their homes. Clearly the court took this seriously and did not regard this as a technical matter. “

At the time of the offence in June 2006, Alarms UK (Residential) Ltd used 'door knockers' to drum up business. Those who expressed an interest in buying an alarm system received a follow-up call and a visit from a sales person, which is defined as an unsolicited call and therefore a notice of cancellation rights must be given if a contract is agreed in the consumers’ home.

This seven-day cooling off period gives an opportunity for a change of mind for whatever reason.

Trading Standards received a complaint that a couple from Welwyn Garden City had signed a contract in these circumstances for the supply and fitting of a domestic alarm system for approximately £1,800, including a £600 discount for signing there and then. They paid a deposit of £475 by cheque.

As soon as the salesman left they had regrets and on making further enquiries decided they wanted to cancel. They contacted Trading Standards, which advised that they should have been given a notice of cancellation rights. The company initially told them that cancelling was not possible. On pursuing the matter they were offered a further discount which they declined, but were then allowed to cancel and stopped their cheque.

The company had been convicted of two offences under the same regulations in a similar case which was brought by Bromley Trading Standards in March 2006

Kelsey, who defended himself, said that following the earlier prosecution a cancellation notice would have been included in the pack left by the salesman and also that a follow up “welcome” letter with cancellation rights would have been sent to the consumer. The consumers said they received neither of these.

Magistrates said they had taken into account that:
● the contents list of the customers’ glossy pack did not refer to a cancellation notice
● the sample form shown to the court did not include the required reference to a seven-day cancellation period
● the follow up letter did not give the required prominence to the cancellation information
● consumers at times might be unable to cancel within seven days of the contract, allowing for the vagaries of the post and how quickly the company posted the “welcome” letter
● Kelsey was a hands-on director and he had not studied the regulations
● Kelsey took responsibility for the company

Hertfordshire Trading Standards will continue to work to protect consumers and advise traders of their legal obligations and what they need to do to comply with the law.

Anyone who has concerns about a trader operating door-to-door in their area should call the Trading Standards Doorstep Hotline on 0845 6044466. Alternatively, call Consumer direct on 08454 040506 between 8am and 6.30pm Monday to Friday and between 9am and 1pm on Saturdays or visit www.consumerdirect.gov.uk.

Businesses unsure of their legal obligations can contact the Trading Standards Business and Commercial Line on 01727 813849 for advice.

Consumers wishing to make a complaint about alarm companies should let their local police Crime Prevention Officer know (details are on www.herts.police.uk) or call Hertfordshire Constabulary's non-emergency number 0845 3300222.