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OFT obtains undertakings from directors of solar water heating companies

148/07    29 October 2007

Following action by the OFT, Floyd Lewis and June Lewis, the directors of Solar Technik Ltd and Ultimate Energy plc, have signed undertakings that they will not mislead consumers, poorly install solar water heaters and use unfair contract terms.
 
Solar Technik Ltd was put into liquidation in March 2007 but Ultimate Energy plc continues to trade.

The OFT has secured personal undertakings from each of the directors that they will not, in the course of business, breach certain consumer protection legislation. In particular, the undertakings broadly state in the future they will not:

• give the misleading impression or make misrepresentations that products will: provide heating (including background heating) if they will not; reduce a person's fuel, energy, gas, electricity or oil bills or level of usage if they will not; or that people will save money equal to or more than the cost of a product
• supply goods which are not of satisfactory quality, reasonably fit for purpose or do not correspond with their description, or fail to repair or replace goods (where appropriate) within a reasonable time and without causing significant inconvenience
• fail to carry out a service with reasonable care and skill, or
• fail to inform consumers, where required, of their cancellation rights.

Full details of the undertakings are available on this website.

Ray Hall, OFT Director of Markets and Projects, said:

'It is essential that consumers are not misled when making a purchase and are given accurate information about their rights. This is especially important with newer products such as solar energy systems where consumers will rely much more on the information given to them by the companies supplying the product.'

Philip Sellwood, Chief Executive of the Energy Saving Trust, said:

'We welcome this action by the OFT, to ensure consumers are not misled about the benefits of renewable energy solutions such as solar. As the independent organisation in this field, we recommend consumers who are considering solar technology always employ an accredited installer, for example via the Low Carbon Buildings Programme.'

Consumers can find out helpful information about the renewable energy industry from the Energy Savings Trust website.

NOTES

1. Floyd Lewis is a company director and the secretary of Solar Technik Limited (company registration number: 5147692) (in liquidation) whose registered office is at 20 Brunswick Place, Southampton, SO15 2AQ (STL) and a company director of Ultimate Energy plc (company registration number: 5929506) whose registered office is c/o Mazars LLP, 24 Bevis Marks, London, EC3N 7NR (UE).

2. June Lewis is a company director of STL and a company director and the secretary of UE.

3. The OFT sought undertakings under the Enterprise Act 2002.

4. The Enterprise Act 2002 improves consumer protection by giving enforcers strengthened powers to obtain court orders against traders that breach a range of consumer legislation; covering activities such as misleading advertising, misleading price indications, lotteries, sale of goods and services, underage sales, estate agency, misleading health claims, trader descriptions, mock auctions, timeshare, unfair terms in consumer contracts, doorstep selling, distance selling, package travel and consumer credit.

5. The Control of Misleading Advertisement Regulations 1988 (CMARs) largely implement EU Directives on misleading and comparative advertising. They aim to protect consumers and businesses from misleading advertisements and advertisements that make prohibited comparisons. The OFT's main role under the CMARs is to support and reinforce the existing advertising controls exercised by other bodies, not replace them. The OFT will step in where it is in the public interest that an advertisement should be stopped and future misleading advertisements prevented by means of a court injunction against those concerned, or by the threat of it.

6. The Misrepresentation Act 1967 widens the circumstances in which a consumer may recover damages for misrepresentation which induces him/her to enter into a contract.

7. The Supply of Goods and Services Act 1982 implies certain terms into contracts for work and materials. These implied terms are that the work will be carried out with reasonable skill and care; where no time for the work has been agreed, it will be provided within a reasonable time; and where no price has been agreed, or where no method for determining price has been agreed, it will be a reasonable charge. Where materials are supplied the Act requires that these are of satisfactory quality; fit for the purpose; and as described. The Act also contains provisions which set out the remedies to which consumers might be entitled if there is a breach of certain implied terms.

8. The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs) apply to standard contract terms used with consumers. The UTCCRs protect consumers against unfair standard terms in contracts they make with traders. The OFT, and certain other bodies, can take legal action to prevent the use of potentially unfair terms. A term is likely to be considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers. The UTCCRs say that a consumer is not bound by a standard term in a contract with a trader if that term is unfair. Ultimately, only a court can decide whether a term is unfair.

9. The Consumer Protection (Cancellation of Contracts Concluded Away From Business Premises) Regulations 1987 came into force on 1 July 1988 and give cancellation rights to consumers in the area of doorstep selling. The Regulations were amended in 1998 and the main thrust of the legislation is to give consumers cancellation rights when purchasing goods and services away from the trader's normal place of business, and to ensure that all traders operate proper cancellation procedures as laid down in the Regulations. They apply to contracts under which a trader supplies goods or services to a consumer and which are concluded during an unsolicited visit by a trader.

10. The Energy Saving Trust is the independent organisation which, via a network of 49 advice centres across the UK, provides free and impartial advice to help people reduce their energy use. Call 0800 512 012 to speak to a local advisor.

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