How can we the OFT's report be read as anything other than a damning guilty verdict?
It's the use of the word "goodwill" that I find most depressing about Peverel. After its Cirrus subsidiary hoodwinked elderly and vulnerable customers, and after it escaped what should have been a very large fine for Cirrus's colluding with other companies to overcharge, it will make a repayment to the victims, totalling £100,000. This it describes as "goodwill" – a word that the dictionary will tell you carries the meaning of generosity, altruism and philanthropy.
If a thief broke into an elderly person's home, stole £400 but was caught and forced to hand the money back, we would hardly describe that as indicating "goodwill". Maybe Peverel's lawyers are desperate to avoid the word '"compensation" as that would be an admission of guilt. Yet how can we read the Office of Fair Trading's report on the Peverel subsidiary, and three other companies, as anything other than a damning guilty verdict?
Some readers may think Guardian Money is blowing this out of proportion. After all, it was only door entry and alarm systems for some blocks of flats – hardly the worst consumer rip-off in history. And indeed, it isn't. But what makes Cirrus's actions between 2005 and 2009 so contemptible is that the victims of its greed were among the most vulnerable in society. How easy must it be to con 90- or even 100-year-olds living in warden-assisted flats into paying grossly inflated prices, sometimes for "upgrades" that allegedly weren't even necessary. In doing so, Peverel was little better than the nasty types who knock on an old person's house and pressure them into paying wildly inflated prices for tarmacing a drive or clearing gutters.
The thing that marks out Cirrus is that it did it on an organised, corporate scale across the UK. It is also telling that the whistleblowers weren't Cirrus's direct customers, but the sons and daughters of their elderly relatives who were living in these mostly McCarthy & Stone-built flats, who spotted that the bills were just plain wrong.
When, to its credit, the Times newspaper confronted the then boss of Peverel, Nigel Bannister, with early allegations about price fixing, he brushed them aside, declaring that Cirrus provided "an excellent service". In 2011, two years after Peverel had turned itself in (or in its words, "brought this matter to the OFT's attention") but before the OFT's findings were made public, I asked Peverel's public relations manager about tendering processes at Cirrus. In a statement she said: "Peverel companies follow the correct tender process as required by statute but also as a matter of best practice to ensure a quality service to our residents." That may have been true of 2011, but not of the years between 2005 and 2009 at Cirrus.
But then dealing with Peverel and its myriad connected companies has always been a game of dealing with teams of PRs and spin doctors. Over the years I have dealt with multiple PR agencies acting for Peverel, its subsidiaries and its beneficial owner. Money, it seems, can always be found to pay highly expensive City PR firms but not, it appears, to fund more than £100,000 in compensation – sorry, goodwill.
The Office of Fair Trading comes out of this sorry saga with minimal credit. Yes, it did finally name and shame the companies involved with the rigged contracts, but campaigners say it first needed hefty prodding. The leniency given to Peverel/Cirrus has astonished many residents. One can understand a corporate entity earning a reduced penalty for coming clean, but receiving 100% immunity from penalty is going too far. This week, Lloyds Bank was fined £28m by the Financial Conduct Authority, reduced from £35m for settling at an early stage. The OFT needs urgently to revise its immunity policy – and one can only hope that, in its forthcoming investigation into the property management industry, it will show more mettle.
Meanwhile, Peverel has a new chief executive, Janet Entwistle, who has the advantage of not being connected with the Tchenguiz years, under whom complaints about this company reached such a crescendo.
But she is not off to a good start. The payout offered by Peverel strikes campaigners as woefully low. Entwistle should heed Sir Peter Bottomley's call for an independent investigation, paid by Peverel, to establish not just how many contracts were rigged but also if work was carried out needlessly. And for the love of God, stop calling compensation "goodwill".
Renting property
Property
Leasehold
Patrick Collinson
theguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds