UK Government

Insolvency Service (National): '£1.00’ alarm package sets of warning bells at Insolvency Service

Press release   •   Jun 15, 2011 11:45 BST

Three linked companies, two registered in England and one in Scotland, which each sold monitored burglar alarms to members of the public were last week wound up in the High Court following an investigation by Company Investigations of the Insolvency Service.

The court heard that all three companies were linked to SAS Fire & Security Systems Limited (“SAS Fire”), a company wound up in March 2011 following a previous investigation by Company Investigations.

The court also heard that Homeguard Fire & Security Limited (“Homeguard”), Central Intelligence Security Solutions Limited (“CIS Solutions”) and Skynet Security Systems Limited (“Skynet”) were formed in November 2010 to continue the alarm sales business previously carried on by SAS Fire .The business of SAS Fire was, in effect, transferred to Homeguard, CIS Solutions and Skynet in January 2011 and these companies then promoted the sale of burglar and fire alarms on a regional basis with Homeguard operating in Northern England, CIS Solutions in Southern England and Skynet in Scotland.

The investigation showed that all three companies operated in an identical manner to SAS Fire, were under the control of former managers employed by SAS Fire and used the former assets, trading premises and employees of SAS Fire. The companies promoted alarm systems on the basis that they were subject to continuous, remote monitoring and that a “rapid response” service would be provided in the event of an alarm activation.

Investigation also found the companies marketed their alarms exclusively via a series of unsolicited telephone calls which claimed the alarm systems were available at a cost of only £1.00. During subsequent, lengthy home visits by sales agents, which typically took place within 24 hours of the initial phone calls, customers were encouraged to agree the purchase of a monitoring and response package costing up

to £6,000 for a contract of up to 15 years in order to obtain the alarm system at the promoted price of £1.00.

Customers were pressed to make an immediate purchase decision at the time of the sales agent’s visit and the alarm system was typically installed in their home with 48 hours, thereby ceasing the customers statutory right to cancel the contract within seven days.

Evidence suggests that during a seven week period across January and February 2011 the companies generated sales in excess of £860,000.

In winding up the companies the Courts accepted that their activities were a continuation of the unlawful sales practices used by SAS Fire and, that the trading activities of the companies were contrary to the public interest.

Notes to editors

1. Homeguard Fire & Security Ltd was incorporated in November 2010. Its registered office and principal trading address is at Estate House, 18 Fox Street, Preston PR1 2AB. The company also occupied trading premises at various locations in Warrington and Leeds.

2. Central Intelligence Security Solutions Ltd was incorporated in November 2010. Its registered office is at 18 Cunard Court, Brightwen Grove, Stanmore, Middlesex HA7 4WY and the company trades from premises in Edgware, Kingston-upon-Thames, Maidstone and Southampton.

3. Skynet Security Systems Ltd was incorporated in November 2010. Its registered office is at 28 Araburn Drive, East Kilbride, Glasgow G75 8FE and the company trades from premises in Glasgow and Edinburgh.

4. The petitions to wind up Homeguard Fire & Security Ltd and Central Intelligence Security Solutions Ltd in the public interest were presented to the High Court under s124A of the Insolvency Act 1986 on 15 April 2011 and applications were also made on that date for the appointment of a Provisional Liquidator in respect of each company.

5. The Official Receiver was appointed Provisional Liquidator of Homeguard Fire & Security Ltd and Central Intelligence Security Solutions Ltd on 18 April 2011 and the companies were wound up on 6 June 2011.

6. The petition to wind up Skynet Security Systems Ltd in the public interest was presented to the Court of Session under s124A of the Insolvency Act 1986 on 20 April 2011 and an application was also made on that date for the appointment of a Provisional Liquidator in respect of the company.

7. William Thomson Mercer Cleghorn and Emma Sarah Louise Porter, Insolvency Practitioners of Aver Chartered Accountants, Edinburgh were appointed joint Provisional Liquidators of Skynet Security Systems Ltd on 21 April 2011 and the company was wound up on 18 May 2011. 

8. All public enquires concerning the affairs of Skynet Security Systems Ltd should be made to: W Cleghorn & S Porter, Aver Chartered Accountants, 21 York Place, Edinburgh EH1 3EN. Tel: 0330 555 6155..

9. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation and Skills through Company Investigations The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.insolvency.gov.uk

10. All public enquiries concerning the affairs of Homeguard Fire & Security Ltd and Central Intelligence Security Solutions Ltd should be made to: The Official Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester M1 3BN. Tel: 0161 234 8531. Email:piu.north@insolvency.gsi.gov.uk

11. Media Enquiries should be directed to:

Denise Rawls, Press Office Manager, Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW, telephone: 020 7674 6910 or

Ade Daramy, Press Officer, telephone 020 7596 6187.

Contacts

NDS Enquiries 
Phone: For enquiries please contact the issuing dept 
ndsenquiries@coi.gsi.gov.uk