Couple banned after duping businesses to sponsor ‘educational' materials
11th February 2019
Husband and wife team received directorship disqualifications totalling 20 years after they duped small businesses to sponsor unnecessary educational material.
In a two-year period, the pair from Congleton, Cheshire, secured more than £1.7 million from businesses who were led to believe they were investing in books and DVDs about substance abuse in return for advertising in the books.
Child Protection UK Limited was incorporated in 2005 with Paula Ann Carson, nee Kasser, appointed a director at the same time.
Paula Carson would target businesses to sponsor the production and distribution of educational materials, including books and DVDs, concerning the dangers of drug and alcohol use to schools across the UK.
However, complaints were made and the Insolvency Service investigated Child Protection UK's practices, culminating in a winding-up petition presented against the company in April 2010 by the Secretary of State for BEIS.
Paula Carson negotiated with the Secretary of State and got the winding up petition dismissed in November 2010 by signing an undertaking committing her to amend the company's trading practices.
Soon after, Paula met Paul Douglas Carson in 2011 and he became involved in the management of Child Protection UK. The pair then incorporated a second company also in 2011, called Child Guidance UK.
The two companies ran in tandem from the same office and followed exactly the same business model. They would target small businesses to sponsor the production and delivery of books and DVDs to schools and in return, the sponsor's business would receive free advertising in the books. Businesses would then be targeted again for repeat business.
However, the Insolvency Service received fresh complaints about Child Protection UK, resulting in further investigations into the practices of both Child Protection UK and Child Guidance UK.
Investigators discovered that both companies followed a standard procedure for sales calls, where scripts contained potentially misleading statements which may have led customers believing Child Protection UK and Child Guidance UK were charities, worked on behalf of charities or were running a legitimate child safety campaign.
Further enquiries found that the trading practices of Child Protection UK and Child Guidance UK did not make clear to customers about their cancellation rights and while materials were sent out, there was no evidence that they either complied with national curriculum requirements or were of value to the schools who received them.
Between April 2015 and December 2017, Child Protection UK received £871,989 from its sponsors, while Child Guidance UK received £840,017 from its sponsors between April 2015 and December 2017.
Both companies were wound-up in the public interest in April 2018 after Paula Carson failed to fully adhere to the undertaking she had previously agreed with the courts.
And for their misconduct in the companies, both Paula and Paul Carson had their disqualification undertakings accepted by the Secretary of State on 8 January 2019. Paula Carson is disqualified from being a company director for 11 years, while Paul Carson is banned for nine years.
Effective from 29 January 2019 the pair are banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
Ken Beasley, Official Receiver, said:Both Paula and Paul Carson purposefully targeted small businesses to part with their cash with the promise of helping to produce educational materials for schools, with the added bonus of advertising space. However, customers were duped as they failed to realise the two companies were not charities, the materials didn’t comply with national curriculum requirements and very few schools found the materials of any value.
20 years is a significant amount of time for the Carsons to be prevented from running companies and we want to remind businesses to be wary of any calls out of the blue asking to sponsor booklets, diaries or wall planners.
Highland Council warned about the scammers targeting small business with books for schools etc in October 2008 as follows-
The Highland Council is warning Highland businesses not to be duped after complaints that several companies have received bogus high pressure sales telephone calls requesting them to sponsor leaflets, booklets and other materials for their local schools. They are also advising people that new national regulations have been introduced to protect businesses from misleading advertising by other businesses.
Louise Jones, Health Promoting Schools Manager with The Highland Council & NHS Highland, has raised concerns that businesses are being asked to sponsor materials for schools where such materials are freely available as part of NHS Highland’s Health Information and Resource Service. Only Council approved material is circulated to Highland schools.
She said: "The Highland Council and NHS Highland has raised concerns that businesses are being asked to sponsor materials for schools where such materials are freely available as part of NHS Highland’s 'Health Information and Resource Service'. We understand that big-hearted Highland businesses are being conned into wasting their money by sponsoring materials for schools on Health and Wellbeing subjects, which Highland schools have found inappropriate and are unable to use.
“To avoid waste and to ensure only high quality information which is factually correct is provided the Highland Council Education, Culture & Sport Service in partnership with NHS Highland have set up a system of vetting and approval of such materials. We would urge businesses not to be duped by such unsolicited calls and to contact Highland Trading Standards Service for further advice. Local businesses do support school communities very well and this is something we encourage, any business wishing to do so can contact their local school direct to see what kind of support might be most beneficial to them."
Alistair Thomson, Head of Environmental Health and Trading Standards said that they are aware of this type of scam which does resurface in particular forms from time to time. He warned that the scam might tap into ‘emotional blackmail’ as a particularly unscrupulous tactic.
The caller may state that they are a ‘charity’ and that by not confirming the order the Highland business is letting down their local school or are failing a community responsibility of helping vulnerable and disadvantaged children and young adults of receiving valuable guidance.
Verbal demands made over the phone to unsuspecting businesses follow particular patterns and may catch the recipient on such calls unawares.
The opening lines of the conversation may start as:
“Good morning. This is (Name of company). I spoke to you some time ago about sponsoring of (health education/child protection/drugs awareness/sexual health etc) leaflets/promotional materials and I am pleased to say they have now been printed and this order is ready for distribution. Can you confirm the name and address of the local school you wish this order to be sent to?”
Up to this point the business has probably never heard of this company and will certainly become alarmed that either he/she or a member of his staff has agreed to any contract of this nature.
Alistair said: “Knowing how to tackle such telephone calls, some of which become very persistent, can be difficult. However, we have highlighted a few useful tips on how to spot such scam calls that, typically, businesses may receive.”
The tips are:
• You receive a call asking for payment of something you did not order, (this could be sponsorship of books/leaflets/wall charts/diaries), and for local schools in your area;
• The caller does not know the name of your local school and asks for this information to be confirmed or for your post code;
• Despite your protests and denials of making such an order, the caller insists that one has been made under your business name and that you will receive an invoice from anything between £99.00 to £500;
• The caller may become abusive, threatening or try to make you feel guilty for not supporting your local school in this way;
• After the initial unsolicited call is made, you or your staff may receive further calls of a similar nature over a period of time. These repeated calls, may be threatening, abusive or offer further incentives/benefits to the local school if you continue with the order made;
• You may also be informed, by the caller, that previous phone calls have been recorded and that they have a record of a ‘verbal agreement’ having been made. Remember, if the caller has recorded a call and cannot show that you have given permission allowing these conversations to be recorded, then this activity is illegal and transcripts held are inadmissible as evidence in a court. You may also hear a recording of you making a contract or agreeing to an order being placed. Cleverly edited recordings may be used in this manner in order to persuade you that you have no legal rights in this matter. Don’t be taken in. Repeat the denial that no order has been made;
• Finally you may receive an invoice demanding payment for this order placed. Do not ignore this invoice and keep it safe for future reference if required. Write to the business explaining that you have made no such order with them and they should amend their records accordingly. Also state you do not wish to be contacted by them in the future and they should remove your business details from their records. Keep a copy and send it recorded delivery. If you are taken to court over an unpaid invoice of this kind, it is important that you can show you have contacted the business and requested that they put matters right.
Highland Trading Standards would be interested in hearing from any Highland businesses who have received unsolicited calls of this nature or who may have fallen victim to this type of scam.
New regulations have been introduced to protect businesses from misleading advertising by other businesses. The introduction of ‘The Business Protection from Misleading Marketing Regulations 2008’, defines ‘advertising’ as ‘any form of representation promoting the supply of goods and services’. If you have never agreed to sponsoring information materials to schools and have not given permission for your business name to be used in this manner, this may come under the remit of these new regulations and merit further investigation by Highland Trading Standards.
If you are concerned about unsolicited calls you receive as a business or you wish to inform Highland Trading Standards of any information relating to this type of scam, you can speak to trading standards confidentially by telephoning: 0845 600 4222