Andy Pilley: Fleetwood Town owner's fraud targeted children's charities and small businesses

Trading standards have revealed how Fleetwood Town owner Andy Pilley defrauded an array of small businesses and charities.

At the heart of the fraud was a web of interconnected companies that misled innocent small businesses across the UK, the organisation say. Through sham company structures associated with Business Energy Solutions Ltd, BES Commercial Electricity Ltd and Commercial Power Ltd, Pilley and his associates were responsible for targeting small business owners and deceiving them into signing long-term energy contracts between 2014 and 2016.

Trading standards also say between 2010 and 2015, annual turnover in the two BES companies grew from around £15 million to £75 million. By 2019, turnover was over £100 million and combined profits were between £2m and £12m.

A spokesman said: “The fraud worked through a telesales operation run by companies that appeared to be independent with Qualter as the sole director, but were actually controlled by Pilley and his sister Michelle Davidson, who were the directors of the BES energy supply companies. The sales companies targeted small businesses and charities – including guest houses, children’s charities and companies providing support services for disabled people – as they moved into new premises or when their energy contracts were up for renewal.

“In the initial ‘front end’ part of the call, the sales representative would lie about the contracts to persuade business owners to sign-up. The fraudulent mis-selling included false or misleading statements about the length and price of the contract as well as competitor rates. Business owners were then transferred to a different sales representative who would run through terms and conditions and confirm the agreement.

"This was a binding verbal contract and, because it was a business-to-business sale, there was no cooling off period. The fraud worked because the vast majority of customers didn’t realise they had been misled at the point of entering into the verbal contract.

“Evidence shows that the majority of energy contracts sold by the telesales companies went to Pilley and Davidson’s BES companies. By 2014, the volume of business which was being placed with BES was 76%, rising to 86% in 2015 – with longer and more valuable contracts going to BES and the less valuable contracts going to other suppliers.”

Pilley appeared at a hearing in Preston Crown Court on Tuesday where he was told he would be sentenced on Monday, July, 3, on four counts of fraud. Three other people were also found guilty during the same trial. They are:

• Michelle Davidson, aged 49, of Holmefield Avenue, Thornton-Cleveleys, Lancashire, guilty of: fraudulent trading; being concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by another.
• Lee Andrew Qualter, aged 52, of Holmefield Avenue, Thornton-Cleveleys, Lancashire, guilty of: fraudulent trading
• Joel Chapman, aged 37, of Kingston Road, Willerby, Yorkshire, guilty of: fraud by false representation.

Lord Michael Bichard, Chair, National Trading Standards, said: “Small business owners were deliberately deceived and locked in to contracts that were long-term and expensive, leaving many businesses struggling to pay the bills and sadly driving some business owners into making the difficult decision to cease trading. This is not a victimless crime – small business owners have lost vast sums of money to this fraud and many businesses have gone under. Legitimate businesses in the energy market have also lost out by missing out on energy contracts there were diverted to the BES companies.

“This has been a long and complex case and I would like to take this opportunity to thank and congratulate the Trading Standards officers involved for their commitment and perseverance to protect honest customers and safeguard legitimate businesses.”

Councillor Christine Warner, Cabinet Member for Homes, Planning and Safer Communities at Cheshire West and Chester Council added that justice had been done. She said: “Using a number of businesses based in Blackpool, Bispham and Fleetwood, Pilley and his associates targeted small businesses across the country with no regard to the damage of locking them into long-term energy contracts, based on false information would cause for their owners and employees.

"These crimes will not be tolerated”

“Thanks to a tireless investigation by the Trading Standards North West Investigation Team hosted by Cheshire west and Chester Council, the criminals behind the fraud have been brought to justice and stopped from defrauding even more businesses. This verdict is a testament to the persistence of the Trading Standards officers who pursued this investigation over several years and sends a clear message that these crimes will not be tolerated.”

Pilley will face trial with his sister Michelle Davidson, 49, of Holmefield Avenue, Cleveleys, who faces two counts of running a business with the intention of defrauding creditors and one of being concerned with the retention of criminal property, Lee Qualter, 52, of Holmefield Avenue, Cleveleys, faces one allegation of running a company with the intent to defraud. Joel Chapman, 38, of Kingston Road, Willerby, Yorkshire, who also had a Poulton address, is accused of aiding false representation by coercing staff to dupe customers. All four deny the allegations against them.