Director Disqualification – Couple Banned for Duping Businesses
Background to this Director Disqualification Case
A husband and wife team, Paul and Paula Carson, have both received director disqualification bans of 9 and 11 years respectively, for their involvement in Child Protection UK Limited (‘the Company’) which duped small businesses to sponsor unnecessary educational material. In a two-year period, the couple secured more than £1.7 million from businesses who were led to believe they were investing in books and DVDs about substance abuse in return for advertising in the books.
The Insolvency Service Investigated Having Received Complaints
Complaints were made and the Insolvency Service investigated the Company’s practices, culminating in a winding-up petition being presented against the Company in April 2010 by the Secretary of State. Paula Carson negotiated with the Secretary of State and got the winding up petition dismissed in November 2010 by signing an undertaking committing her to amend the company’s trading practices.
Soon after, Paula met Paul Douglas Carson in 2011 and he became involved in the management of Child Protection UK. The pair then incorporated a second company also in 2011, called Child Guidance UK (‘the Second Company’).
The two companies ran in tandem from the same office and followed exactly the same business model. They would target small businesses to sponsor the production and delivery of books and DVDs to schools and in return, the sponsor’s business would receive free advertising in the books. Businesses would then be targeted again for repeat business.
However, the Insolvency Service received fresh complaints about the Second Company, resulting in further investigations into the practices of both Child Protection UK and Child Guidance UK.
Investigators discovered that both companies followed a standard procedure for sales calls, where scripts contained potentially misleading statements which may have led customers into believing Child Protection UK and Child Guidance UK were charities, worked on behalf of charities or were running a legitimate child safety campaign.
Further enquiries found that the trading practices of Child Protection UK and Child Guidance UK did not make clear to customers about their cancellation rights and while materials were sent out, there was no evidence that they either complied with national curriculum requirements or were of value to the schools who received them.
The Businesses Secured More than £1.7million by Duping Sponsors
Between April 2015 and December 2017, Child Protection UK received £871,989.00 from its sponsors, while Child Guidance UK received £840,017.00 from its sponsors between April 2015 and December 2017.
Both companies were wound-up in the public interest in April 2018 after Paula Carson failed to fully adhere to the undertaking she had previously agreed with the courts.
And for their misconduct in the companies, both Paula and Paul Carson had their director disqualification undertakings accepted by the Secretary of State on 8 January 2019. Paula Carson is disqualified from being a company director for 11 years, while Paul Carson is banned for 9 years.
Effective from 29 January 2019 the pair are banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
Insolvency Service Comment
Ken Beasley, Official Receiver, said:
“Both Paula and Paul Carson purposefully targeted small businesses to part with their cash with the promise of helping to produce educational materials for schools, with the added bonus of advertising space. However, customers were duped as they failed to realise the two companies were not charities, the materials didn’t comply with national curriculum requirements and very few schools found the materials of any value.
20 years is a significant amount of time for the Carsons to be prevented from running companies and we want to remind businesses to be wary of any calls out of the blue asking to sponsor booklets, diaries or wall planners.”
Our Director Disqualification Solicitors Comment
The significant bans handed down show the seriousness with which the Insolvency Service view such conduct. The team at NDP are experienced in dealing with such claims. For help and advice on defending yourself if threatened with director disqualification, talk to our director disqualification solicitors by calling us on 0121 200 7040, or contact us. The earlier you make contact, the more we can do to help.