Ruthless Beds Company That Preyed On Elderly Goes Bust
Feb 25 2008 Exclusive by Annie Brown
RUTHLESS salesmen who pressure the elderly and infirm in to buying overpriced therapy beds have seen their company go bust.
AppA UK Ltd went in to compulsory liquidation after the Record exposed the lies and brutal techniques the sales teams use on vulnerable customers.
Company director Graham Hutchinson financed a millionaire lifestyle by selling the beds at seven times their cost price.
Sales teams were taught to exploit the elderly's fear of illness to flog them beds.
Parents of terminally ill children and people with learning difficulties were also given the hard sell.
But after complaints from across the UK, North Ayrshire Trading Standards recovered nearly £40,000 for consumers.
AppA were supplied by Palatine, a bed manufacturer owned by Newcastle City Council and managed partly by their social services team. More than half of their workforce have a disability.
The beds were bought by AppA for as little as £587, shipped up to their headquarters in Stevenston, Ayrshire, then sold for £4000.
Palatine are a highly reputable company who sell the same bed in their public showroom in Newcastle for £800.
They do not use any sales pressure on their customers. Following our expose in November 2005, Hutchinson sued the Daily Record for defamation, preventing us from going in to further detail about his company.
But last month, he was forced to abandon his case.
The taxman is also chasing AppA for £260,000 in unpaid taxes.
While dozens of his workers now face the dole, Hutchinson lives in a £500,000 home in West Kilbride, Ayrshire, drives a Ferrari and sails a racing yacht.
Following our investigation, the Office of Fair Trading questioned the company's credit licence. Ray Hall, director of markets and projects at the OFT, said: "We do not condone business practices of this kind - particularly when vulnerable consumers are involved."
Sales boss Donald MacPherson boasted that he sold credit to one lady of 92.
Another customer was jobless Alfred McCurdie, who only had £220 a month to live on and £60 of it was going on repayments for his AppA bed.
Alfred, 43, who has learning difficulties, bought an adjustable "therapy" bed for more than £3000.
The credit agreement would have cost more than £700 in interest alone.
But after the revelations in the Record, Alfred's GP wrote to credit company Clydesdale Financial Services to say he had been in no fit mental state to sign an agreement and the debt was written off.
We also heard how AppA sold a £3000 bed to a stroke victim with memory loss and spent three hours trying to persuade a heartbroken couple to buy a £4000 bed for their terminally ill little girl.
Several customers had their debts cleared after Trading Standards established they were not capable of committing to a finance agreement.
Our reporter had joined a six-day training course for bed "demonstrators" - not sales staff - at AppA's HQ in Stevenston.
Afterwards, they would be able to earn up to £1000 commission on a bed. Our reporter heard sales boss MacPherson telling a class of trainees to prey on the fears of old people and to convince them the beds would dramatically boost circulation.
He said: "They are not frightened of death. They are frightened of losing their independence."
He told our investigator: "If you can't sell one of these beds to a diabetic, you should be put up against the wall and f***ing shot."
And he said no customer was too poor to buy the bed and to pursue a sale no matter how many times someone said no.
No one from AppA was available for comment.
SOURCE: dailyrecordUK
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