Insolvency Service Investigation Sees Company Closed

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Solar Energy Savings Limited (“Solar”), which marketed and sold solar panel systems to the general public, was wound-up on 26 July 2012 by the High Court in Manchester on a petition presented by the Secretary of State for Business, Innovation and Skills in the public interest following an investigation by Company Investigations of The Insolvency Service.

Solar, based in Manchester but with offices throughout Great Britain, commenced trading in early 2011 and had a turnover of more than £50m. The company did not itself carry out the installation of the solar panels but contacted prospective customers via a series of telephone marketing calls leading ultimately to a home visit by a salesman.

The investigation found that Solar engaged in serious mis-selling practices during these home visits involving high pressure sales tactics, misrepresentation and other illegal or irregular sales practices.

In particular:

  • customers were falsely led to believe that Solar was part of a government backed or officially authorised scheme providing discounts of up to 30% but that these were limited by number or time;
  • Solar’s salesmen consistently overstated the performance of the panels and the return on investment likely to be achieved by the customer;
  • Solar claimed to be a member of a trade body when it was not;
  • customers were subjected to a sales pitch lasting in excess of two hours and signed contracts merely to get the salesman to leave their homes;
  • customers were incorrectly told that the system could be reinstalled free of charge if they moved home;
  • Solar induced customers to sign a contract with the promise that they would receive the full amount of their purchase price back after five years through a scheme falsely said to be underwritten by an international company called Capital Suisse;
  • Solar failed to maintain adequate accounting records, preventing the Investigator from obtaining accurate information about sales and cancellations, customer deposits and the true nature and extent of payments made from its bank account.

At trial, Solar did not admit the Secretary of State’s allegations but did not object to the making of a winding up order on the grounds alleged by the Secretary of State and the Court was satisfied that Solar should be wound up.

Commenting on the case, Scott Crighton, Investigation Supervisor said:

“Solar Energy Savings Limited persistently and deliberately flouted both statutory regulations and industry standard selling practices in order to generate sales and widely promoted a non-existent scheme in order to induce members of the public into signing a contract.”

These proceedings make clear that The Insolvency Service will take firm and decisive action to protect the public against such objectionable practices.”

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