Back in April 2012 the BBC 5 live Investigates put together this great investigation into Commercial Energy and BES which exposes the connections between Andrew Pilley and Lee Qualter. Needless to say I wish I knew about it back then, it would be great if Adrian Goldberg revisited them.
Update 16/02/16
The fantastic Commercial Futilities Blog has pointed out that Andrew Pilley had the cheek to raise a complaint to Ofcom regarding the 5 live Investigates program! The complaint was thrown out.
The transcripts below, taken from Ofcom.
Warning the Ofcom report is much better formatted than mine.
Complaint by Mr Andrew Pilley
Radio 5 Live Investigates, Radio 5 Live, 22 April 2012
Summary: Ofcom found that this complaint of unjust or unfair treatment made by Mr Andrew Pilley should not be upheld. The programme included an investigation into the business practices of a company called Commercial Energy Limited (Commercial Energy), a brokerage firm that negotiates energy contracts for small business customers. It also looked at possible links between Commercial Energy and Mr Andrew Pilley who owns an energy supply company called Business Energy Solutions (BES) and is the Chairman of Fleetwood Town Football Club.
Ofcom found that:
- Mr Pilley was not treated unfairly in the programme as broadcast in that the programme makers took reasonable care in presenting the material facts in relation to the allegations made about Mr Pilley in the report and the programme included a fair representation of the responses which were given to criticisms included in the programme on Mr Pilley’s behalf.
- Mr Pilley was given an appropriate and timely opportunity to respond to the claims made about him in the programme.
Introduction
On 22 April 2012, the BBC’s Radio 5 Live broadcast an edition of its consumer affairs programme 5 Live Investigates. The programme included an investigation into the business practices of a company called Commercial Energy Limited (“Commercial Energy”), a brokerage firm that negotiates energy contracts for small business
customers. The presenter, Mr Adrian Goldberg, introduced the programme by saying:
“Tonight, shocking tactics, the electricity broker caught by us conning people into signing energy deals that are costly and unnecessary...but who is behind these rogue energy traders? We explore possible links to the Chairman of Fleetwood Town.”
Mr Goldberg went on to name the Chairman of Fleetwood Town Football Club (“Fleetwood Town”) as “Andy Pilley”
and said that, notwithstanding Mr Pilley’s denial of any connection to Commercial Energy, staff at the company believed that he was their boss.
During the investigation into Commercial Energy, a reporter on the programme said that there was evidence that some telesales staff there were “bamboozling and lying to win customers”.
The programme reported on how the owner of a business called Maxitrak (which had signed up to a new energy contract through Commercial Energy) said that rather than negotiating the best energy deal for his company, Commercial Energy had organised a deal which was more expensive than the emergency tariff offered by his former supplier. The owner of Maxitrak explained that the new contract was with a company called BES (Business Energy Solutions) which, the programme said, was owned by Mr Pilley.
The programme also included covert recordings of staff at Commercial Energy. In one of these recordings, a telesales employee was heard telling a potential client company that he was calling to register energy meters. The programme said that there was no legal requirement to register energy meters in the UK, but that
Commercial Energy used this technique in order to elicit the meter numbers of the companies it called to check if the company had an existing energy contract.
The programme also said that Commercial Energy “usually but not always push you towards a contract with Business Energy Solutions... which is run by... Andy Pilley” before adding that Mr
Pilley had told the programme that “there is nothing wrong with a broker wanting any of its suppliers to grow”.
The programme subsequently indicated that rather than “scouring the market” for the best deals for its customers, some telesales staff at Commercial Energy made up false comparative prices “to push customers in the direction of their preferred suppliers including BES”. It added that this technique of making up false comparative prices (as well as the detail that it was a practice led by the senior sales staff) was explained to new staff during training. Covert recordings of staff were included in the programme to illustrate these points.
Another contributor to the programme was heard saying that staff at Commercial Energy had misrepresented the
mselves by indicating to her that they were calling from British Gas and thereby deceived her into signing up for a new contract.
The programme said that Mr Pilley “spends time at the offices of Commercial Energy” and that some sales staff described him as “the big boss” and spoke of company outings and financial incentives arranged for them by Mr Pilley. This section of the programme included a covert recording of a training session at Commercial Energy
during which the member of staff conducting the training said that Mr Pilley owned Commercial Energy, BES and Fleetwood Town.
The programme explained that Mr Pilley had declined an offer of an interview and sections of a statement were read out which Mr Pilley’s solicitor had sent to the BBC in response to the claims being made about him in the programme. Following the broadcast of the programme, Mr Stephen Lister of Heatons LLP, Mr Pilley’s solicitors, complained to Ofcom that Mr Pilley was treated unjustly or unfairly in the programme as broadcast.
Summary of the complaint and broadcaster’s response
The details of Mr Pilley’s complaint are set out below, followed by the BBC’s responses on particular points.
In summary, Mr Lister complained that Mr Pilley was treated unjustly or unfairly in the programme as broadcast in that:
1. Mr Pilley was presented unfairly in the programme in that:
i) The programme alleged that Mr Pilley controlled Commercial Energy (either financially or otherwise) notwithstanding the fact that he is neither a shareholder nor a director of that company.
In response, the BBC said that the programme’s investigation was prompted by research which found that high levels of complaints had been made to consumer organisations (notably Blackpool Trading Standards and Consumer Focus)
The BBC said that the programme clearly stated that it was not claiming that Commercial Energy was controlled by Mr Pilley and on a number of occasions made it clear that Mr Pilley had denied any link to the company. It also said that the programme stated that Mr Pilley was not listed as a director or shareholder in the company.
The BBC acknowledged that, notwithstanding the inclusion of the points noted above, the programme also pointed out that there was considerable and cogent corroborative evidence of some connection between the company and Mr Pilley.
It said that Mr Pilley sublet part of the Commercial Energy’s premises and spent time in its offices. He admitted that he provided perks and bonuses for staff at the company. He was also a director of the energy supplier BES which received many referrals from Commercial Energy.
The BBC said that the secret recordings undertaken for the programme provided further evidence of Mr Pilley’s links to Commercial Energy. It said that “Danielle”, the person described as a junior employee by the complainant, was actually the person who met the programme’s undercover journalist and other new recruits on their first day and briefed them about the company. She told them she had worked there for four years (although Commercial Energy was not established until 2010). Mr Lee Goulding (aka Mr Lee Qualter) also came into the meeting room on that first day and told the new recruits that Danielle was someone who “knows everything about electric and gas”. It was Danielle who showed the new recruits a presentation which included a slide with logos of Fleetwood Town, Commercial Energy, and BES and explicitly made a connection between Mr Pilley and these companies. The BBC added that before starting work, the undercover journalist was interviewed by a female employee named Kirsty who met him at Darwin Court (the address where Commercial Energy was based) and took him to Mr Goulding’s office to fill in an application form which was clearly headed “Commercial Energy”. During the course of their secretly recorded
conversation, Kirsty made several comments linking Commercial Energy with Mr Pilley and/or the businesses in which he had an established interest, i.e. Fleetwood Town and BES. In addition, although the job taken by the undercover journalist had been advertised as being with Commercial Energy, he and the other new recruits were presented with three identical contracts for Commercial Energy, BES and Fleetwood Wanderers Limited trading a
s Fleetwood Town (copies of which were supplied to Ofcom). The BBC said that when asked by the undercover journalist
“how come we’re signing up for Fleetwood Wanderers?”, Danielle first sought advice on how to respond and then said “...the boss owns three separate companies...so it has to be shared between... it’s exactly the same contract, it’s just... obviously it just got to come out of all the companies that’s its companies...Yeah, he owns here and Fleetwood Town Football Club so the way it’s paid obviously it comes out of all three”.
ii) The programme alleged that Mr Pilley was often seen on the premises of Commercial Energy but failed to broadcast the explanation that Commercial Power (a company in which Mr Pilley owns a majority shareholding and of which he is a director) sublets part of its premises to Commercial Energy.
In response, the BBC said that the this explanation was not included in any of Mr Pilley’s responses to the programme’s enquiries and the undercover reporter saw no evidence of Commercial Power being located at Darwin Court. Mr Pilley’s link to Commercial Energy was corroborated by the fact that Commercial Energy also has premises at Unit 7, Metropolitan Business Park, Blackpool and used this address in its contracts of employment. This ad
dress was also the business address that Mr Pilley recently used on documents submitted to Companies
House. In addition, the BBC said that a “source” at Commercial Energy told the programme that sales staff there understood Mr Pilley to be their boss and that he (i.e. the “source”) had, like the undercover reporter, signed three contracts when he first began working for Commercial Energy in September 2011 for Commercial Energy, Commercial Power and Fleetwood Town.
iii) The programme failed adequately to distinguish between the respective roles of BES and Commercial Energy thereby implying that Mr Pilley controlled Commercial Energy and was therefore responsible for any alleged “mis-selling” of energy contracts. The BBC said that the programme made a clear distinction between brokers and
energy suppliers and between BES and Commercial Energy, and that this was particularly the case in its presentation of the story of a customer who tried to cancel a contract with BES, but was told the contract had been take
n out with Commercial Energy and that BES could do nothing about it. It also said that at an early stage the reporter spelt out the brokers’ role, with a specific reference to Commercial Energy. In particular, the BBC said that when representing Mr Pilley’s statement, the reporter made the position absolutely explicit:
Reporter: “He [Mr Andrew Pilley] is not listed at Companies House as being linked to Commercial Energy. He issued us with a statement through his lawyer. He strongly denies that he – or BES – have any financial
interest in Commercial Energy or any control over its operations. He accuses us of a lack of understanding of the way the energy market operates. And he said that all brokers who deal with the company have to act in accordance with its code of conduct.
Presenter: Yes - but what about the fact that staff who we’ve heard recorded seemed to think that Mr Pilley owned Commercial Energy? Some referred to him – we’ve heard it – as the ‘big boss’.
Reporter: Well Mr Pilley’s lawyer says it’s
not surprising that he is regarded in this way. He says he’s an important man in the energy market. As the director of BES and another energy company he deals with more than 80 brokers and is responsible - in his lawyer’s words –
for encouraging best practice. The statement says –and I quote directly – “The fact that he may be referred to as the ‘big boss’ within Commercial Energy does not mean that he is acknowledged literally as their boss”.”
iv)The programme failed to broadcast Mr Pilley’s position (as set out in his statement) that, notwithstanding its independence from Commercial Energy, BES sought to impose its own regulatory framework upon Commercial Energy in order protect customers and required the sales personnel at Commercial Energy to adhere to a script which would have made “mis-selling” impossible.
In response the BBC said that the programme made this point clearly within the reporter’s representation of Mr Pilley’s response to the claims made about him (see extract from programme set out in head a) iii) above). However, the BBC added that while Mr Pilley’s position on these matters was represented, it was evident from some of the conversations that were secretly recorded and from the script used for training sales staff at Commercial Energy that best practice was not required of them. The script failed to guard against mis-selling by not requiring the Commercial Energy caller to say that they were a broker. Instead, it told them to say that they were “...calling from Commercial Energy meter registrations” which, created a strong likelihood that the customer would believe they were being called by some official body. It told them to say that “I am going to register your meters today for you” when there was and is no requirement to register meters. The script also failed to make clear that the broker can only search part of the market and obtain quotes from a limited number of suppliers. The broker was then told to say, “Now I have all the information I am going to go away and have a look into the supply and see what rates are available to you in your area... is there any particular supplier you want to register with or is it just
the best?”.
v)The programme sought to establish a link between Mr Pilley, BES and Fleetwood Town and Commercial
Energy when there was no significant evidence that such a link could be implied. By way of example, Mr Lister said that the programme indicated that Commercial Energy’s offices were located between Blackpool and Fleetwood when this was quite untrue and included a number of gratuitous references to Fleetwood Town.
In response, the BBC set out a range of evidence which it said strongly suggested a link between BES, Commercial Energy and Commercial Power. This evidence included:
- Companies House records which showed that the sole director of Commercial Energy was Mr Lee Qualter – who is also known as Mr Lee Goulding – and that Mr Pilley, the majority shareholder of BES and Commercial Power, was co-director, with Mr Goulding, of two dissolved companies.
- Online job advertisements apparently for both Commercial Power and Commercial Energy with very similar or exactly the same details including telephone numbers, company history and the wording in general.
- Testimony from a source inside one of the brokerage companies describing questionable sales techniques.
The BBC added that Mr Pilley was a prominent figure in sporting circles in the North West and beyond, by virtue of his position with Fleetwood Town. It also said that BES and Commercial Power, Mr Pilley’s companies, were two of the club’s main commercial sponsors and that the latter had made loans of more than £4.3 million to Fleetwood Town. The BBC said that Mr Pilley’s name would have been familiar to many Radio 5 Live listeners who would have been puzzled had the programme not mentioned the fact of his chairmanship of the club. The broadcaster added that the connection was also mentioned because, as noted above, one of the contracts for services that workers were asked to sign was with Fleetwood Town, and sales staff working at Commercial Energy were introduced to the connection with Fleetwood Town by the company’s trainer, Danielle, who said it was one of their connected companies. Moreover, the programme’s undercover journalist was told about sales incentives events held at Fleetwood Town, which was confirmed in the statement provided to the programme on behalf of Mr Pilley on 20 April 2012.
The BBC said that the programme did not say that Commercial Energy’s offices were between Blackpool and Fleetwood, but in fact it said that “Commercial Energy operates out of an industrial unit half way between Blackpool and Fleetwood in Lancashire”.
The BBC said that this was an accurate description of the location of Darwin Court, where the Commercial Energy sales operation was based, and that it was included to give listeners a sense of the geography of the
story rather than to make a gratuitous reference to the football club.
vi)The presenter used a tone of incredulity throughout the relevant section of the programme thereby expressing his disbelief of the points made by Mr Pilley in his statement of response. In response, the BBC said that the programmes’ presenter, Mr Goldberg, had an individual and conversational style appropriate to the network and very familiar to the audience. Mr Goldberg did not adopt an unusually incredulous tone in relation to Mr Pilley, and it was a matter of fact that he placed considerable emphasis on Mr Pilley’s denials of any connection with Commercial Energy. The BBC said that there was no difference in his presentational tone during this item and that used in later parts of the programme or in other editions of 5 Live Investigates.
vii)The programme made the unwarranted suggestion that Mr Pilley was not a ‘Fit and Proper Person’ under Football Association (“the FA”) rules and used innuendo to suggest that the FA should investigate Mr Pilley on this basis. The BBC said that the programme did not suggest that Mr Pilley was not a “fit and proper person”, nor did it suggest – either explicitly or implicitly – that the FA should investigate him. At one point, Mr Goldberg said that if Mr Pilley was linked to Commercial Energy it would “all be rather embarrassing for Football League new boys Fleetwood Town” for the reason that Commercial Power had made substantial loans to the Club. In any case, the reporter again responded immediately with an unequivocal statement of Mr Pilley’s position that “...as we’ve heard Andy Pilley is adamant he doesn’t run Commercial Energy and isn’t responsible for any mis-selling on their part”.
b)The programme makers failed to give Mr Pilley an appropriate and timely opportunity to respond to the claims the programme made about him. On behalf of Mr Pilley, Mr Lister said that although the programme (broadcast on
22 April 2012) had been in preparation for some time, the programme makers gave Mr Pilley just over three working days in which to respond to the claims being made about him. The programme makers sent a letter dated 13 April 2012
to Mr Pilley which informed him of the plan to broadcast the programme, set out a number of detailed allegations about him, and invited him to give an on-air interview or to submit a statement in response by 19 April 2012. Mr Lister added that due to engagements related to his football club (Fleetwood Town) Mr Pilley did not receive this letter until 16 April 2012. Mr Lister said that despite the difficulties involved in meeting this deadline he sent a statement on behalf of Mr Pilley in response to the programme makers claims on 19 April 2012. Mr Lister also said that he subsequently received an email, sent at 16:52 hours on 19 April 2012, which set out further allegations against Mr Pilley and required a response by noon the next day (i.e. 20 April 2012). Mr Lister said that although he
managed to respond to the follow-up email by 15:28 hours on 20 April 2012 it was only good fortune which enabled him to elicit Mr Pilley’s response to by this time.
Mr Lister said that the BBC acknowledged in its email of 19 April 2012 that it had made covert recordings at Commercial Energy. He added that given the existence of these recordings the programme makers must have been aware that they intended to make these further allegations against Mr Pilley when they sent their initial letter to him and therefore these allegations should have been included in that letter. In response, the BBC said that the programme makers’ first approach to Mr Pilley was a letter sent on 13 April 2012 setting out in considerable detail the issues under investigation which the programme sought to put to Mr Pilley. This allowed almost five working days (plus the weekend) for his response which provided sufficient time for a response to issues with which he would be familiar in his day-to-day role as an energy supplier and as someone whose company, he said, tried to impose its own regulatory framework on its independent brokers. The BBC said that Mr Pilley would also have been familiar with some of the issues through earlier coverage in ‘The Daily Mail’, referred to in the letter from Mr Lister of 19 April 2012. The BBC said that this initial letter laid out in detail all the areas that might potentially be dealt with in the programme, including questions about links Mr Pilley might have with Commercial Energy. It set out clearly the suggestion to Mr Pilley that Commercial Energy was one of a number of companies which “are in effect controlled by you” and that “you are regularly on the premises from which some of these companies operate”. The BBC said the letter also stated that:
“The programme is also likely to look at:
The relationship between you, the companies above and Fleetwood
Wanderers Ltd, including the provision of funding to the latter and whether you are a fit and proper person to run a football club. Your relationship with Lee Goulding, also known as Lee Qualter, and his role in the companies.
The contractual relationship that salespeople have with Commercial Energy Ltd, BES Ltd and Fleetwood Wanderers Ltd...”.
The BBC acknowledged that the programme makers did not disclose, at that stage, that they had obtained secretly-recorded evidence about Commercial Energy because it was simply not relevant to the substance of the issues. It argued that if Mr Pilley was responding in good faith, his response would not have been affected by knowledge that the programme had secretly recorded evidence. The BBC said that given the clarity and detail with which the issues under consideration –misrepresentation and mis-selling by Commercial Energy staff – were set out, it would have been apparent that the matter had been thoroughly researched and reasonable to expect Mr Pilley to respond on that basis. The BBC said that on 19 April 2012, when the programme makers received the complainant’s response to their initial letter, it became clear that Mr Pilley was not prepared to respond to the allegations in an interview, and that his response to the question of connections with Commercial Energy was to suggest that the BBC had confused this company with another of his companies, Commercial Power. At that point, the programme makers felt it was important to provide Mr Pilley with the opportunity to respond specifically to some of the secretly-recorded comments of employees at Commercial Energy. However, no substantive allegation was put to him at this stage and in particular he had already been asked about his relationship with Commercial Energy in the letter sent to him by the programme makers on 13 April 2012.
Representations on Ofcom’s Preliminary View
Ofcom prepared a Preliminary View in this case that Mr Pilley’s complaint should not be upheld. Neither Mr Pilley nor the BBC commented on that Preliminary View. However, the BBC did respond to a query from Ofcom about an apparent
contradiction in the broadcaster’s statement regarding whether or not Commercial Power operated from premises at Darwin Court near Blackpool. The BBC acknowledged that Commercial Power owned the Darwin Court building and that the company operated from it up until 2010, i.e. the same period complaints were being received about the Commercial Power by consumer groups. However, it said that when the programme’s informant worked at Darwin Court (over a few days in March and April 2012) there was no evidence of Commercial Power’s presence such as might explain Mr Pilley’s visits to the premises. The BBC added that this was because by this period Commercial Energy had effectively supplanted Commercial Power as a broker and that this explained Mr Pilley’s presence.
Decision
Ofcom’s statutory duties include the application, in the case of all television and radio services, of standards which provide adequate protection to members of the public and all other persons from unjust or unfair treatment and unwarranted infringement of privacy in, or in connection with the obtaining of material included in, programmes in such services. In carrying out its duties, Ofcom has regard to the need to secure that the application of these standards is in the manner that best guarantees an appropriate level of freedom of expression. Ofcom is also obliged to have regard, in all cases, to the principles under which regulatory activities should be transparent, ccountable,
proportionate and consistent and targeted only at cases in which action is needed.
In reaching its Decision, Ofcom carefully considered all the relevant material provided by both parties. This included a recording of the programme as broadcast and transcript and both parties’ written submissions (including pre-broadcast correspondence between the broadcaster and the complainant). Ofcom also took careful account of the BBC’s clarification of its statement with regard to Mr Pilley’s presence at Darwin Court. When considering complaints of unjust or unfair treatment, Ofcom has regard to whether the broadcaster’s actions ensured that the programme as broadcast avoided unjust or unfair treatment of individuals and organisations, as set out in Rule 7.1 of Ofcom’s Broadcasting Code (“the Code”). Ofcom had regard to this Rule when reaching its Decision on the individual heads of complaint detailed below.
Ofcom first considered the complaint that Mr Pilley was unfairly portrayed.
In considering this part of the complaint, Ofcom had regard to Practice 7.9 of the Code which provides that before broadcasting a factual programme, broadcasters should take reasonable care to satisfy themselves that material facts have not been presented, disregarded or omitted in a way that is unfair to the individual or organisation, and that anyone whose omission could be unfair to an individual or organisation has been offered an opportunity to contribute. It also took account of Practice 7.6 which states that that when a programme is edited, contributions should be represented fairly. Ofcom assessed each element of the programme that Mr Lister complained had resulted overall in the unfair portrayal of Mr Pilley.
The programme alleged that Mr Pilley controlled Commercial Energy (either financially or otherwise) notwithstanding the fact that he is neither a shareholder nor a director of that company. Ofcom noted that the programmes’ presenter, Mr Adrian Goldberg, introduced the programme by saying: “Tonight: Shocking tactics - the electricity broker caught by us conning people into signing energy deals that are costly and unnecessary...but who's behind the rogue energy traders? We explore possible links to the owner of Fleetwood Town, newly promoted to the Football League”.
On two occasions the presenter said that the programme had tried to understand why “some staff at Commercial Energy think that Andy Pilley, the chairman at newly - promoted Fleetwood Town think that he’s their boss when he says he isn’t”. The presenter then asked a reporter, who had been looking into Commercial Energy, what she had found out about who controlled Commercial Energy. The reporter said: “Well, it is a bit of a mystery really Adrian. Companies House records show that a Mr Lee Qualter is the director. He also goes by the name of Lee Goulding and he's in charge of sales at Commercial Energy. But our evidence suggests that there's another person closely linked with Commercial Energy and that’s multi-millionaire businessman Andrew Pilley. He's also the chairman of Fleetwood Town football club – as you’ve said recently promoted to the Football League.... He is a director of the energy supply company - Business Energy Solutions or BES. As we've heard they are often recommended to customers by the salespeople at Commercial Energy. But he strenuously denies any financial interest in Commercial Energy.”
The presenter observed that “it might be confusing to some of our listeners because Business Energy Solutions or BES is the energy supplier involved in the two cases of mis-selling that we've heard about tonight”.
To which the reporter
added:
“Yes. And alt
hough Mr Pilley says he's not in charge at Commercial
Energy
-
the staff there seem to think otherwise. And some describe him as the
'big boss’”
.
A discussion between the presenter and a second reporter who had posed as a
new recruit at Commercial Energy
in order to secretly record conversations with
staff about the way the company operated (“the undercover reporter”) followed.
During this discussion, Ofcom noted that the undercover reporter said that Mr
Pilley had spent time at the offices of Commercial
Energy and that during a
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
75
presentation one of the trainers, Danielle, who said she had worked for the
company for four years, had spoken about
“a business relationship between Mr
Pilley, the various energy companies and Fleetwood Town FC”
and that other
me
mbers of staff (including one in a senior position) had told him
“about the
various incentives and bonuses he
[Mr Pilley]
offers”
. The programme included
the following comments made by the trainer and a senior member of staff which
were secretly recorded d
uring the training session.
Trainer:
“What you see on here... Fleetwood Town is what Andy, Andy
Pilley, is the director here. He owns Commercial Energy,
Commercial Energy is linked to Fleetwood Town
–
obviously
they’re
[inaudible]
BES, he’s got shares in
them as well. So it’s all
linked together yes? Andy is linked with all of these and that’s
where....This is the cycle of money that it all goes round, OK?”
Staff member:
“Andy as well
–
the big boss
–
Pilley
–
we have a quarterly do. So
he takes us all to
Fleetwood and gives you a free bar. All
afternoon, there’s a band on, buffet, everything like that. Probably
like once a month he will do like a day where every time you get a
deal you go and choose an envelope. Now the envelopes range
from £5 to £50 to f
ree breakfast to do
-
you know what I mean? To
get you going in incentives. Andy does do things like that, you
know to try and give you a bit of incentive”.
Given the inclusion of the comments set out above, Ofcom takes the view that
listeners would have
understood that the programme was indicating that there
was evidence to suggest that Mr Pilley controlled Commercial Energy. Ofcom
observed that this claim was based on the first
-
hand testimony of several
members of staff at Commercial Energy, a number of
whom were secretly
recorded linking
Commercial Energy with Mr Pilley and/or his other businesses,
BES and Fleetwood Town. There was nothing to suggest that this testimony was
not credible,
given that it was recorded secretly and in circumstances where the
staff in question would have had no reason not to be candid. The claim was also
based upon the facts that: in addition to having its sales unit at Darwin Court,
Commercial Energy also had premises at Unit 7, Metropolitan Business Park,
Blackpool, an addres
s which Mr Pilley had recently used on documents submitted
to Companies House; and, both the undercover reporter and a “source” at
Commercial Energy had signed three contracts when they had began working for
Commercial Energy: one for Commercial Energy, on
e for Commercial Power and
one for Fleetwood Town. In Ofcom’s view, this evidence provided the programme
makers with a reasonable basis for broadcasting in the programme
the claim that
there was evidence to suggest that Mr Pilley controlled Commercial Ener
gy
.
The programme makers sought Mr Pilley’s response (which was provided by his
solicitor) to the allegations made in the programme and his response was
summarised in the programme (see Decision at head b) below for details). Ofcom
took the view that the
presentation of the summary of Mr Pilley’s response to the
allegation that he controlled Commercial Energy would have left viewers in no
doubt that he
was not listed as a director of Commercial Energy, and that he
denied that either he or his company, BES
, had any financial link to or control
over Commercial Energy. Ofcom considered that, given the inclusion of these
comments, listeners would have been able to draw their own conclusions with
regard to this matter relating to Mr Pilley’s position.
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
76
Taking
the above factors into account, Ofcom considered that the broadcaster
had taken reasonable steps when presenting this material not to do so in a way
that portrayed Mr Pilley unfairly.
ii)
The programme alleged that Mr Pilley was often seen on the premise
s of
Commercial Energy but failed to broadcast the explanation that Commercial
Power sublets part of its premises to Commercial Energy.
In response to a question from the presenter about Mr Pilley’s relationship with
Commercial Energy, the undercover rep
orter said:
“
Well Mr Pilley does spend
time at the offices of Commercial Energy”
[i.e. Darwin Court]. The programme did
not indicate that this was because one of Mr Pilley’s other companies,
Commercial Power, sublet part of these premises.
Ofcom noted th
at in its response to this complaint the BBC said that
the
undercover reporter saw no evidence of Commercial Power being located at
Darwin Court. However, within this same response the BBC also said that in
contrast to the situation in 2009, in the year to
April 2012 most complaints about
energy contracts made to consumer bodies in the area were not about
Commercial Power but about another company, Commercial Energy, operating
from the same premises at Darwin Court, Blackpool. In addition, Ofcom took
accoun
t of the fact that neither of the statements submitted to the programme
makers prior to the broadcast (in response to the claims the programme planned
to make about Mr Pilley) indicated that Commercial Power sublet part of its
Darwin Court premises to Comm
ercial Energy, or that this might account for Mr
Pilley’s presence there.
Notwithstanding these observations, it is Ofcom’s view that, given the inclusion in
the programme of the claim that there was evidence to suggest that Mr Pilley
controlled Commerci
al Energy (a claim for which Ofcom concluded the
programme makers had a reasonable basis) and the repeated references to his
denials of this claim, the omission of the information that one of Mr Pilley’s
companies, Commercial Power, sublet premises to Comm
ercial Energy did not,
in itself, lead to the report being unfair to Mr Pilley.
iii)
The programme failed adequately to distinguish between the respective roles of
BES and Commercial Energy thereby implying that Mr Pilley controlled
Commercial Energy and
was therefore responsible for any alleged “mis
-
selling” of
energy contracts.
Ofcom noted that at the beginning of the programme the reporter said:
“Well there are estimated to be up to 500 independent energy brokers in the
UK. They arrange deals on beha
lf of business users who, after all, are often
too busy to arrange the deals and search the market for themselves.
Commercial Energy are significant players in this market. As you've already
said Adrian, they
[Commercial Energy]
claim to provide the bigges
t brokering
service to small businesses that there is”.
She also said:
“If a business moves into a new building and doesn't have a contract for gas
or electricity in place, they can end up on a really expensive one, what’s
called an emergency tariff. And
that’s the same if their existing contract has
expired and they haven’t done anything to renew it. So Commercial Energy
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
77
rings businesses in this position and says it can arrange a new deal with
savings of up to 40 per cent. The problem is that our evidenc
e shows that
some telesales staff at Commercial Energy are bamboozling and lying to win
customers
-
and some of the people who've signed up have ended up on
more costly contracts”.
The programme then included an interview with the owner of a business call
ed
Maxitrak (which had signed up to a new energy contract through Commercial
Energy), who said that rather than negotiating the best energy deal for his
company, Commercial Energy had organised a deal which was more expensive
than the emergency tariff offe
red by his former supplier. He explained that the
new contract was with a company called BES. The programme said that BES
was owned by Mr Pilley.
The programme stated that Commercial Energy
“
usually, but not always, push
you towards a contract with Busin
ess Energy Solutions or BES which is run by
Fleetwood Town's chairman Andy Pilley. Through his lawyers, Mr Pilley says
there's nothing wrong with a broker wanting any of its suppliers to grow
-
and he
insists BES is a legitimate business with proper checks
and balances”.
When asked by the presenter what was wrong with this, the reporter said:
“Well nothing
-
if BES does offer the best deal. Commercial Energy should be
scouring the market for the most competitive prices
-
our evidence shows
that's not ha
ppening. And some telesales staff are even making up false
comparative prices to push customers in the direction of their preferred
suppliers, including BES”.
As noted in the Decision at head a) i) above the presenter also said that
“
Business Energy Solu
tions or BES is the energy supplier involved in the two
cases of mis
-
selling that we've heard about tonight”,
and the reporter
subsequently reiterated Mr Pilley position that he did not control Commercial
Energy.
In light of these observations (and those
set out in the
Preliminary View
at head
a) i) this of complaint), Ofcom considered that the programme included a clear
explanation that Commercial Energy was an energy broker, the business of which
was to search for the best energy deals available to its p
otential customers, and
that BES was an energy supplier. Ofcom also considered that listeners would
have understood that Mr Pilley owned and operated BES and that, although the
programme claimed there was evidence to suggest that he controlled
Commercial E
nergy, he strongly denied both this claim and the claim that he was
responsible for any mis
-
selling by Commercial Energy.
For these reasons, Ofcom concluded that there was no unfairness to Mr Pilley in
this respect.
iv)
The programme failed to broadcas
t Mr Pilley’s position (as set out in his
statement) that: BES, notwithstanding its independence from Commercial
Energy, sought to impose its own regulatory framework upon Commercial Energy
in order to protect customers; and required the sales personnel at
Commercial
Energy to adhere to a script which would have made “mis
-
selling” impossible.
Ofcom considered that the extracts from the programme quoted in the Decision at
heads a) i) and iii) made it clear that the report alleged that Commercial Energy
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
78
had
mis
-
sold energy contracts, and in particular, that it had sold contracts for
supply from BES when BES was not the cheapest option available to the client.
In addition, secret recordings of sales staff at Commercial Energy included in the
programme indicat
ed that they implied, falsely, that they: had called potential
clients to register their meters; denied that they were calling from an energy
broker; and, routinely made
-
up false comparative prices.
However, Ofcom observed that not only did the programme
repeatedly state that
Mr Pilley denied that he controlled Commercial Energy (or was responsible for
any alleged mis
-
selling on its part), it also explained that in response to the claims
in the programme, Mr Pilley’s lawyer had said that
“all brokers who d
eal with the
company
[i.e. BES]
have to act in accordance with its code of conduct”
and that
Mr Pilley
“
deals with more than 80 brokers and is responsible...for encouraging
best practice”.
In Ofcom’s view, therefore, it would have been clear to listeners
that Mr Pilley’s
view was that all the brokers who sold BES contracts, including Commercial
Energy, had to adhere to its code for the selling of energy contracts and that this
code constituted best practice. Ofcom concluded that there was no unfairness to
Mr Pilley in this respect.
v)
The programme sought to establish a link between Mr Pilley, BES and Fleetwood
Town and Commercial Energy when there was no significant evidence that such
a link could be implied. By way of example, Mr Lister said that the pr
ogramme
indicated that Commercial Energy’s offices were located between Blackpool and
Fleetwood when this was quite untrue and included a number of gratuitous
references to Fleetwood Town.
Ofcom noted that on a number of occasions the programme indicated
that as well
as owning BES, Mr Pilley was the chairman of Fleetwood Town. In addition, as
has already been considered at head a) i) of the Decision, the programme also
indicated that there was evidence to suggest that Mr Pilley controlled Commercial
Energ
y.
The question of whether or not to mention Mr Pilley’s chairmanship of Fleetwood
Town was an editorial matter for the programme makers and the broadcaster to
make prior to the broadcast of a programme. However, broadcasters must ensure
that material fa
cts are not presented in the programme in a way that results in
unfairness to an individual or organisation.
Ofcom recognised that Fleetwood Town, and Mr Pilley as its chairman, would
have been familiar to listeners to Radio 5 Live given that it is a new
s and sports
service which includes extensive coverage of league football at all levels. We also
considered that there was a reasonable basis for the inclusion in the programme
of the claim that Mr Pilley controlled Commercial Energy (see head a) i) of the
Decision above). Given this and the repeated inclusion of Mr Pilley’s denials of
this claim included in the programme, Ofcom concluded that the inclusion of
references to Mr Pilley, BES and Fleetwood Town in the context of a report
looking at alleged mis
-
selling by Commercial Energy did not result in unfairness
to Mr Pilley.
Ofcom observed that the parties disagreed about whether or not Darwin Court,
the office from which Commercial Energy ran its sales operation, was located
between Blackpool and Fleetw
ood. However, it considered that the location of
this office (regardless of its accuracy) would have had no material impact on
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
79
listeners’ impressions of Mr Pilley that could be reasonably considered as
creating unfairness to him in the programme.
vi)
The
presenter used a tone of incredulity throughout the relevant section of the
programme thereby expressing his disbelief of the points made by Mr Pilley in his
statement of response.
Ofcom considered that the presenter, Mr Goldberg, had an individual styl
e of
presentation which was conversational in tone and that his established
presentational persona was that of “a man of the people” who championed
consumer rights. In Ofcom’s opinion the style of presentation Mr Goldberg used
during the section of the rep
ort on Commercial Energy (including during the
references to Mr Pilley’s response to the claims made about him) was consistent
with the approach he used during the rest of the programme in which other topics
were discussed. Mr Goldberg’s presentation style
would clearly have been
familiar to regular listeners to the programme. Ofcom therefore considered that
the presenter had not used any materially different style of presenting solely in
connection with Mr Pilley.
For these reasons, Ofcom concluded that M
r Pilley was not treated unfairly in
respect of the tone of voice used by Mr Goldberg during the report.
vii)
The programme made the unwarranted suggestion that Mr Pilley was not a ‘Fit
and Proper Person’ under FA rules and used innuendo to suggest that
the FA
should investigate Mr Pilley on this basis.
The presenter said:
“I mean if Andy Pilley was linked to the running of Commercial Energy, it
would all be rather embarrassing for Football League new boys Fleetwood
Town wouldn’t it? They’ve had loans
of more than £4 million from his
business empire”.
In Ofcom’s view, this comment indicated that, in Mr Goldberg’s opinion, the
reputation of Fleetwood Town might suffer if Mr Pilley, its chairman and one of its
major sponsors, was found to be linked with
Commercial Energy given his
ownership of energy supply company BES.
The initial letter from the programme makers to Mr Pilley setting out the claims
which the programme planned to make about him (see head b) below for details)
said that “the programme i
s also likely to look at the relationship between you, the
companies above [i.e. Commercial Energy, BES and Commercial Power] and
Fleetwood Wanderers Ltd, including the provision of funding to the latter and
whether you are a fit and proper person to run a
football club”. However, the
programme did not either state or imply that Mr Pilley was not a fit and proper
person to chair Fleetwood Town. Nor did it make any reference to the FA or
suggest that Mr Pilley should be investigated by the FA. In addition, a
s set out in
the Decision at head b) below, the programme repeatedly made clear Mr Pilley’s
denial of any formal links to Commercial Energy.
Taking account of all of these factors, Ofcom’s
Preliminary View
is that Mr Pilley
was not treated unfairly in th
is respect.
Having considered all these sub
-
heads separately, Ofcom also had regard to the
evidence that the programme included a number of extracts and references to the
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
80
statements provided to the programme makers by Mr Pilley’s solicitor (see head b)
b
elow). Taking account of all these factors, Ofcom found that overall Mr Pilley was
not unfairly portrayed, and so not treated unjustly or unfairly, in this programme.
b)
Ofcom then considered the complaint that the programme makers failed to give
Mr Pill
ey an appropriate and timely opportunity to respond to the claims the
programme made about him.
In considering this head of complaint, Ofcom took particular account of Practice
7.11 of the Code which states that if a programme alleges wrongdoing or
incom
petence or makes other significant allegations, those concerned should
normally be given an appropriate and timely opportunity to respond.
As noted at head a) of the Decision above, Ofcom noted that the report said that
there was evidence to suggest that
Mr Pilley controlled Commercial Energy (an
energy broker which the programme said sold a high proportion of energy supply
contracts from BES, a company which was owned and operated by Mr Pilley).
The programme also indicated that staff at Commercial Energ
y had mis
-
sold
energy contracts, notably from BES. Ofcom considered that these claims
amounted to an allegation of wrongdoing on the part of Mr Pilley. As was also
noted above, Ofcom concluded that the programme makers had a reasonable
foundation for inclu
ding these claims in the programme. However,
given the
serious nature of the allegation of wrongdoing made against Mr Pilley, in
accordance with practice 7.11 of the Code, it was incumbent upon the
programme makers to offer Mr Pilley an appropriate and tim
ely opportunity to
respond to the claims being made about him.
Ofcom noted that on 13 April 2012 the programme makers sent a letter to Mr
Pilley in which they set out, in specific detail, the nature of the claims the
programme intended to make regarding
mis
-
selling at Commercial Energy and
the programme makers’ belief that Commercial Energy was one of a number of
companies which were controlled by Mr Pilley. The letter explained that the plan
was to broadcast the programme on 22 April 2012 and indicated t
hat the
programme makers would like to interview Mr Pilley about these allegations “at a
mutually agreeable time, but by no later than midday on Thursday 19 April 2012”.
It noted too that the programme makers asked Mr Pilley to provide a statement in
respo
nse by the same deadline if he did not wish to be interviewed.
Mr Pilley’s solicitor said that Mr Pilley did not receive this letter until 16 April 2012
but that he sent a statement on behalf of Mr Pilley in response to the programme
makers’ claims on 19
April 2012. On 20 April 2012, Mr Lister also sent a
response (on behalf of Mr Pilley) to a follow
-
up email (sent at 16:52 hours 19 April
2012) from the programme makers.
Mr Lister indicated in Mr Pilley’s complaint that the programme makers had
allowed
insufficient time for Mr Pilley to respond to the claims made about him.
However, Ofcom noted that despite not receiving the initial letter from the
programme makers until 16 April 2012, Mr Pilley still had four working days prior
to the planned broadcast
of the programme in which to respond and that, in any
case, Mr Lister had sent an initial statement in response to these claims on 19
April 2012.
The programme makers did not reveal to Mr Pilley that the programme had
secretly recorded conversations with
staff at Commercial Energy until it sent its
follow up email on 19 April 2012. However, Ofcom noted that this email did not
Ofcom Broadcast Bulletin, Issue 216
22 October 2012
81
include any new allegations about Mr Pilley and Mr Pilley’s alleged link to Commercial Energy, rather it sought clarification on what the programme makers regarded as inconsistencies between the initial response sent on behalf of Mr Pilley and the information gathered by the undercover reporter during his time working at Commercial Energy. In deciding whether in this case the opportunity given to Mr Pilley to respond was appropriate and timely, Ofcom took into account whether, given the nature of the questions put to him, it was reasonable to expect him to respond in the time allowed. In light of the fact that Mr Pilley was given at least four working days to answer questions about his long established role as an energy supplier and his alleged links to specific companies, and the fact that Mr Pilley’s solicitors did, in fact, submit a response to the BBC’s queries, Ofcom considered t hat he was given sufficient time to respond to the claims 5 Live Investigates planned to make about him. Ofcom also noted that a summary of Mr Pilley’s response was included in the programme. In particular, the programme stated that, in response to its investigation, Mr Pilley said that
“He [Andrew Pilley] is not listed at Companies House as being linked to Commercial Energy... he strongly denies that he - or BES - have any financial interest in Commercial Energy or any control over its operations [and that he] is adamant he doesn't run Commercial Energy and isn't responsible for any mis-selling on their part”.
In addition, the programme stated that Mr Pilley’s solicitor responded to the
claims made about Mr Pilley by saying that given Mr Pilley was “an important man in the energy market” it was “not surprising” that some staff at Commercial Energy seemed to think that he owned the company and “the fact that he may be referred to as the 'big boss' within Commercial Energy does not mean that he is acknowledged literally as their boss”. The programme also included Mr Lister’s response to the claim that Mr Pilley arranged bonuses and social functions for staff at Commercial Energy. Specifically, listeners were told that Mr Lister: had accused the programme of “trying to distort the true picture”; said that “arranging incentives and bonuses is commonplace throughout the energy industry”; and, added that, “All businesses take contacts, suppliers and customers out for
lunches, dinners or drinks. We are sure journalists do likewise. There is nothing wrong in this...”.
In light of these observations and taking into account the factors noted above, notably the detailed nature of the initial letter from the programme makers and the fact that the follow - up did not include any new allegations of wrongdoing, Ofcom concluded that Mr Pilley was given an appropriate and timely opportunity to respond to the claims made about him in the programme. Ofcom therefore found that there was no unfairness to Mr Pilley in this respect.
Accordingly, Ofcom found that Mr Pilley’s complaint of unjust or unfair treatment in the programme as broadcast should not be upheld.
