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Roof Coaters Get Prison in $3.7M Scam

Friday, April 26, 2013

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Two members of a UK roof coatings company will each serve a year in prison for a scheme that defrauded hundreds of elderly homeowners of $3.7 million over two years.

Newlook Roof Coatings Ltd. director Phillip Christopher Twose, 59, and salesman John Colin Gumbrell, 52, were both sentenced April 17 to 12 months in prison for “rogue trading offenses,” the Herefordshire Council announced.

“This is the biggest and most disturbing rogue trader investigation we have ever undertaken,” Mike Pigrem, the council’s head of consumer and business protection, said after the sentencing hearing in Worcester Crown Court.

Newlook Roof Coatings
Newlook Roof Coatings Ltd.

Newlook scammed hundreds of victims for two years until police raided its offices, authorities said. The company, which has also been cited repeatedly for safety violations, bills itself as the "best of the best."

"There were over 500 potential victims," Pigrem said. "I believe this is a landmark case exposing the ‘roof coating scam’ which has taken hold in the UK over the last decade."

Cold Calls and Fears

Prosecutor Tim Moores told the court that Newlook Roof Coatings had cold-called victims who were “predominantly elderly and vulnerable and coerced them into signing contracts for wholly unnecessary work that involved applying roof coatings.”

The company told the homeowners that moss found on their roof would destroy it and that the homeowner would need a “whole new replacement at an exorbitant cost,” the council’s trading standards service said in an announcement.

Newlook also “charged far in excess of what a reasonable price should be by deceiving consumers with false ‘show home’ discounts taken off outrageously high starting prices for the work,” the service said.

Million-Dollar Pressure

In addition, Gumbrell, the salesman, falsely called himself a "surveyor" when he had no qualifications to do so and pressured consumers by saying the discounted price was “only available that day,” authorities said.

The charges cover a 16-month period beginning in September 2009, during which the company made about £1.7 million ($2.6 million USD) from the scam, authorities said. The company took in more than £2.4 million ($3.7 million USD) total in a two-year period that ended in December 2011, when Trading Standards and West Mercia Police from Hereford raided Newlook's Monmouth offices.

‘Best of the Best’

Newlook did not respond Thursday (April 25) to a request for comment. On its website, the company says it has more than 27 years of experience and calls its services “the best of the best.”

Mossy roof Clean roof
Newlook Roof Coatings Ltd.

The company advertises a six-step "roof restoration" process (illustrated with these photos) that prosecutors called "wholly unnecessary." Homeowners were warned in cold calls that moss would destroy their roofs.

The coating contractor describes a six-step “roof restoration” process that begins with a “detailed pre-clean inspection” followed by roof cleaning to remove moss and “expose problem areas.”

That is followed by cleaning, repairs and application of a “fungicidal wash” and “two coats of unique protective coating.”

The “show home” promotion figures prominently on the website, promising “a massive saving on our standard prices.”

Prior Troubles

The painting company has been on authorities’ radar for several years.

In August 2012, the company was cited by the Health and Safety Executive (the UK’s occupational safety agency) for “repeated instances of unsafe work at height by operatives working on roof coating jobs...."

Trading Standards PSA
Heresfordshire Council

Local authorities called the case "the biggest and most disturbing rogue trader investigation we have ever undertaken."

HSE advised Newlook that its personnel “are not competent to carry out the duties you have given to them in relation to health and safety at the jobs, and that further information, instruction and training is required. This is in relation to work at any place in Great Britain.”

HSE also imposed stop-work orders on the company twice in 2011, citing it once for four violations and once for six violations related to working at heights.

In October 2011, HSE records show, an employee of Newlook fell seven meters (about 23 feet) from an unprotected roof and fractured his wrist. (A bush broke his fall.) The company was fined £10,000 ($15,400 USD) for two violations stemming from that case.

Defense: ‘Not a Cowboy Company’

Twose’s lawyer said at sentencing that Twose was a former police officer who had retired from the force after being injured in the line of duty. The lawyer said that Newlook Roof Coatings “was not a cowboy company and that the work did have value,” prosecutors said.

The attorney also said Twose had followed advice from his local Trading Standards office.

Gumbrell’s lawyer contended that his client “had not acted dishonestly” and that coatings were applied that “did increase the lifespan of the tiles.”

Judge: ‘Loss, Anxiety and Indignation’

The judge, Adrian Redgrave, disagreed.

“Your motive behind the offenses was to extract as much money as possible from the public,” Redgrave told the defendants. “The methods adopted are not unfamiliar: cold calling and misrepresenting the need for the remedial work to the roof.

“Whether or not the elderly were targeted, many were indeed elderly. The sales pitch began with an alarmingly high price, then with a series of so-called discounts, the price was reduced by order of two-thirds.

“You are not the first, nor will you be the last, to employ these tactics. Part of the reason for these sentences is the hope that others will be discouraged. Your conduct caused loss to some, anxiety for many, and gives rise to indignation on the part of the public at large.”

Pigrem said the prosecution and sentence should send “a strong message to the large number of other companies out there who also cold call for roof coating work.”

He added, “In our opinion, there is no doubt that moss causes no damage whatsoever to tiles and the roof coating process is a wholly unnecessary treatment.”

   

Tagged categories: Business operations; Enforcement; Laws and litigation; Mold/mildew-resistant coatings; Paint and Coating Sales

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