By Rachel Adamson, above, Head of Fraud and Regulatory, Adkirk Law
On the July 4, Andrew Pilley, owner of Fleetwood Town Football Club, was sentenced to 13 years in prison following a lengthy trial over allegations that he had defrauded independent local businesses by mis-selling energy supply contracts. The verdict delivered at Preston Court in May found him guilty of all three charges against him. I had the privilege of being part of the prosecution team, where we witnessed firsthand the detrimental consequences of Mr Pilley’s fraud, which trapped independent businesses owners into highly damaging verbal contracts.
In delivering the verdict, Judge Graham Knowles KC noted that he ‘told brazen lies to the jury’, and later that his business was one where ‘the best liars were promoted’. Indeed, lies encapsulated the very essence of Mr Pilley’s case, and whilst the conviction has served as a notable victory for the local independent businesses that Mr Pilley’s operation targeted, it has equally shed light on the potential dangers of aggressive sales tactics and verbal contracts that businesses, and especially independent ones, must be alive to.
Be prepared for the call
Starting a new business is an incredibly exciting, yet daunting venture. With a myriad of things to think about and organise when gearing up to open for business, this is a window of vulnerability. Sales teams, such as those that operated within Mr Pilley’s businesses, will be aware of this, and they will often look to capitalise on this vulnerability by calling new business owners in this window. It’s therefore important to be aware that as a newly starting independent businesses, you will very likely be bombarded with sales calls.
This initial call can set the stage for salespeople to bullishly talk you into entering a legally binding verbal contract without allowing you an opportunity to properly consider what you are signing up to, and if it is the right option for you.
In the most severe cases, salespeople will quite simply tell lies to fabricate an even greater sense of urgency, or to assure you that they are providing you with the best rates available on the market, when in fact they are only providing you with the best rates that their company offers rather than an independent, unbiased view.
My main piece of advice for independent businesses is to anticipate these calls and always exercise caution when receiving them. Some calls may be more aggressive than others, but it is important to remain steadfast and resist the panic-induced urge to just say ‘yes’ over the phone. You always have the option to request a call back at a later time, or to say you will look into the issue further, even if the salesperson has pushed a convincing reason that the call must be dealt with there and then. Instead, allow yourself the time to conduct your research and make informed decisions that align with the actual needs of your business.
When to sound the alarm bells
The true danger of these calls comes when the conversation transitions from the initial call to the ‘contract call’. Salespeople will sometimes not clarify that you are entering the ‘contact call’, where, at this point, your words are legally binding.
If an aggressive salesperson has successfully rushed you to a point where you have agreed to speak to another person, whether they have suggested this a colleague or an entirely different company, this is when the alarm bells should be ringing, and you must be especially cautious of agreeing to anything.
It is not too late at this point to request a call back, or to say that you’re unable to speak further at this time, provided you have not verbally agreed at this stage of the call to purchase or sign up to anything that has been offered to you.
Keep meticulous records
Many sales calls are recorded by the selling company; however, this is for their benefit, not for yours. Aggressive sales tactics often include speed talking through the finer details of a call so that you’re unable to fully understand them, and if you interrupt to clarify a point, they may begin their patter again from the top. This can then provide the salesperson with an uninterrupted recording of the terms you are discussing, seemingly demonstrating that you fully understand and agree to them.
Moreover, companies are typically unwilling to share the initial recording, which could be essential evidence in the event of a dispute. If it is legally permissible in your jurisdiction, consider using a personal recording device to create your own record of the call. This ensures that you have evidence readily available if a verbal contract turns sour. Additionally, don’t be afraid to ask salespeople to slow down their patter and take meticulous written notes.
Additionally, always request the names of the company and the sales agent you’re speaking with and conduct thorough research on the company before agreeing to anything. Fraudulent companies may operate under fictitious names, so if an online search yields limited results, exercise caution and approach the situation with scepticism.
The key takeaway: take precautionary measures
Honest businesses will root out liars to prevent mis-selling and fraud, but nefarious businesses such as those run by Andrew Pilley will not. For new business owners who do not have much experience with contracts, and even for established independent owners with limited time for admin, the consequences of entering into a verbal contract can be catastrophic.
Taking diligent precautions during sales calls is not just a suggestion but a necessary step to safeguard your interests and ensure the longevity of your business.
