84/11    22 July 2011

The OFT has acted to remove the consumer credit licence of Stockport-based SAS Fire & Security Systems Limited (SAS Fire) after an investigation found it used aggressive sales techniques to persuade consumers to buy costly burglar and fire alarm systems. The OFT has also taken action against three other companies associated with SAS Fire.

SAS Fire and the three associated companies First Cheshire Finance Solutions Limited, UK Monitoring and Response Solutions Limited (Formerly Alarms Direct Limited) and SAS Financial Solutions Limited are major suppliers of domestic security systems and as part of their business offered credit to consumers purchasing their products or services.

The OFT's investigation found that SAS Fire had breached consumer protection legislation banning the use of high pressure and aggressive sales techniques, particularly when dealing with consumers in their homes, by:

• falsely stating that its products will be available at a particular price for a limited period in order to elicit an immediate decision to purchase from consumers
• falsely suggesting that alarms provided by local councils were not free
• misrepresenting Government crime statistics to make consumers fear for their personal safety, and
• falsely claiming that its products have been approved, endorsed or authorised by a public body.

The investigation also uncovered evidence that SAS Fire had actively prevented consumers from exercising their right to claim a refund upon cancellation of their contracts. Despite earlier detailed warnings and action taken by the courts and other regulators, SAS Fire continued to engage in unfair business practices that were not consistent with fitness to hold a licence under the Consumer Credit Act 1974.

Following the issue of the OFT's Minded to Revoke Notice and its subsequent compulsory winding up, SAS Fire surrendered its licence.

Determinations to revoke the licence of First Cheshire Finance Solutions Limited and determinations to refuse the licence applications of UK Monitoring and Response Solutions Limited (Formerly Alarms Direct Limited) and SAS Financial Solutions Limited were made on 4 July 2011.

David Fisher, Director of the OFT's Consumer Credit Group, said:

'This action sends a clear message that it is unacceptable for any business to engage in aggressive and high pressure sales tactics. We will continue to target our work to protect the most vulnerable consumers.'

NOTES

1. On 2 February 2011, Minded to Revoke Notices were issued by an OFT Adjudicator to SAS Fire & Security Systems Limited (SAS Fire) and First Cheshire Finance Solutions Limited. Minded to Refuse Notices were also issued to two associated companies which had applied for consumer credit licences, UK Monitoring and Response Solutions Limited (Formerly Alarms Direct Limited) and SAS Financial Solutions Limited, on the same date.
2. The OFT's decision to revoke and refuse the licences is subject to appeal and does not finally take effect until the end of any appeal process.
3. The Consumer Credit Act 1974 (the Act) requires most businesses offering credit, lending money or involved in activities relating to credit or hire to be licensed by the OFT. In determining the fitness of a business to hold a licence, the Act permits the OFT to have regard to the conduct of third parties such as agents, associates and employees of that business.
4. The Consumer Protection from Unfair Trading Regulations 2008 came into force on 26 May 2008. The Regulations introduce a general duty not to trade unfairly and seek to ensure that traders act honestly and fairly towards their customers. They also prohibit misleading and aggressive commercial practices.
5. The Cancellation of Contracts made in a Consumer's Home or Place of Work Etc Regulations 2008 are aimed at traders who enter into a contract with a consumer at their home or workplace. The regulations require cancellation rights to be clearly and prominently displayed in any written contract or provided in writing if there is no written contract.