Vesternet UK: handle with care

Posted on
Sun Sep 10, 2017 5:56 pm
Turribeach offline
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Joined: Feb 06, 2015
Location: London, UK

Vesternet UK: handle with care

I recently ordered a Home Automation device from Vesternet UK. They have been a really good source of home automation devices, support and sales advice in the UK and Europe. While checking my credit card statement I noticed a charge for SMARTECH HOLDINGS SMART LONDON which didn't sound familiar. After a quick check I realised it was the item I bought from Vesternet UK. I made half a dozen orders with Vesternet before and I was sure the credit card charge always showed as Vesternet LTD so I decided to investigate (the internet is such a great place if you know where to look). I found that Vesternet LTD (who used to own Vesternet.com/co.uk) has been put into administration (see here). This is a legal term for a UK company that's basically deemed bankrupt or unable to cope with its debts (similar to Chapter 11 in the US). The only company director, David Bell, has been declared bankrupt on May 2017 (see here). I wasn't aware of this change until I made my order. I looked into the Vesternet site and I can't any information regarding this change of ownership. The blog section of the website does not show any relevant posts. While a UK limited company is NOT legally bound to communicate ownership changes to their customers I would have preferred a bit more clarify from Vesternet. The site's Terms of Service now indicate that the site is operated by Smartech Holdings Ltd. I looked at this company as well (see here) and I found that it has recently been created and that the only director is Kelly Bell (same last name as the previous owner of Vesternet Ltd) and that both Bell's were born in 1980 so they are both of similar age (at this stage my guess was that they were husband and wife). Kelly Bell also shows named in a Vesternet Ltd company charge as a witness (see page 23 of this PDF). A company charge is basically a record of a company debt in the UK's companies registrar (Companies House). Obviously this means that Kelly Bell was involved with Vesternet LTD before it went into administration as otherwise she would not have been a witness on that document.

Further checks revealed that Kelly Bell is indeed's David Bell's wife and that she bought all the company assets for £30k (see page 7 of Statement of administrator's proposal document). While the stock was valued at £27,998 the other items sold were Seller's records at £ 1, Customer Contracts £ 1 and Intellectual Property £ 2,000 (website code, domain name, company name, etc). This to me seems surreal as I would have imagined those 3 things could be a lot more valuable than that, specially to Vesternet's competitors. Now I don't want to claim this is a smoking gun but at the very least this is all very suspicious. It's a well known tactic that some company directors use in the UK when companies get into difficulty which then declare themselves bankrupt, put the company in administration and all the company's debts are written off while the company then resurfaces trading with a family member in charge and/or a different name. The state of affairs document posted by the Administrators (see here) seems to show debts of nearly half a million pounds which is quite significant. David Bell has an outstanding company loan of £275k. The document claims the company got into cashflow issues due to rapid expansion and used several high interest loans and VAT (aka TAX) money to increase stock and increase sales. While sales turnover was dramatically increased (2016 turnover was £1.4m) the business wasn't viable. This quite common on small companies that grow too fast and loose control of their costs.

So those are pretty much all the facts. I don't have any more information as to whether Vesternet.com (now trading under Smartech Holdings Ltd) will honour current and future orders, support and warranty cases. The item I recently ordered is allegedly in transit and should arrive this week. I will advice people to be careful with future orders. I can suggest the following:

    Split large purchases into smaller orders and wait for each order to arrive before you order again, to reduce risk of non-delivery.
    Always use a credit card but be aware that to be protected under UK's section 75 the item must be worth between £ 100 and £ 30,000 (see here)
    Assume items will come with no support or no warranty and that you might not get your money back if you want to return them

Posted on
Mon Sep 11, 2017 2:36 am
durosity offline
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Re: Vesternet UK: handle with care

Yeah unfortunately quite a common situation in the world of small businesses (and large to be fair). I was a bit concerned when they started to massively increase their product lines and become more mainstream. I also seem to recall a short lived foray into the US market. I hope this hasn't affected Matt & Jay too much since they may have been creditors. (On a side note to that i notice Indigo is still listed as Indigo 6 on Vesternet's website).

Computer says no.

Posted on
Mon Sep 11, 2017 3:05 am
Turribeach offline
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Joined: Feb 06, 2015
Location: London, UK

Re: Vesternet UK: handle with care

I don't see Perceptive Automation on the list of creditors so they seem to have avoided falling into debt with them. About £255k of the debt is to business lenders. I counted 9 different companies/banks which is surprising, my educated guess is that once a business starts drawing into high interest, unsecured loans alarm bells should sound to subsequent lenders when they asses the credit worthiness of the company. Another £100k is to HMRC (tax). The rest seem to be suppliers and others.

My main concern and the reason for this post is that clearly the same people that ran nearly half a million pounds in debts and bankrupt Vesternet are still behind it. So while I can't be sure there has been any ill intentions/fraud/negligence what's to say that the new company doesn't end with the same outcome?

Posted on
Mon Sep 11, 2017 8:48 am
jay (support) offline
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Re: Vesternet UK: handle with care

durosity wrote:
On a side note to that i notice Indigo is still listed as Indigo 6 on Vesternet's website


Yeah, we aren't selling Indigo 7 through resellers yet for technical reasons (but everyone who buys I6 from them gets a free upgrade). I don't think they have any outstanding POs with us fortunately.

Jay (Indigo Support)
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Posted on
Mon Sep 11, 2017 9:15 am
durosity offline
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Re: Vesternet UK: handle with care

@Turribeach unfortunately not much you can do.. if wrongdoing is found they may be banned from being directors but so far everything appears to be kosher!

@jay good good.. don’t want lack of payment causing you to default on our homes mortgage!

Computer says no.

Posted on
Mon Sep 11, 2017 11:08 am
mat offline
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Joined: Nov 25, 2010
Location: Cambridgeshire - UK

Re: Vesternet UK: handle with care

I guess proceed with caution. They are/were my preferred supplier

mini 10.11.6 and indigo 7.02

Posted on
Mon Sep 11, 2017 2:51 pm
CliveS offline
Posts: 109
Joined: Jan 10, 2016
Location: Medomsley, County Durham, UK

Re: Vesternet UK: handle with care

I bought a couple of key fobs from Vesternet on the 3 April 2017 and one went faulty so I sent it back on the 14 August and recieved a replacement on the 29 August. I now have a Sensative strip I returned last week and requested a refund which they have agreed to so I await the outcome of that.

CliveS

Posted on
Wed Sep 13, 2017 9:04 am
CliveS offline
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Joined: Jan 10, 2016
Location: Medomsley, County Durham, UK

Re: Vesternet UK: handle with care

CliveS wrote:
I bought a couple of key fobs from Vesternet on the 3 April 2017 and one went faulty so I sent it back on the 14 August and recieved a replacement on the 29 August. I now have a Sensative strip I returned last week and requested a refund which they have agreed to so I await the outcome of that.

CliveS


Update to above

I have just received a full refund for the Sensative Strip sent back to Vesternet last week and that was bought from them before they went into administration so it seems it is business as usual, and the refund is now in my Paypal account from Smartech Holdings.

CliveS

Posted on
Wed Sep 13, 2017 9:50 am
durosity offline
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Re: Vesternet UK: handle with care

Interesting! Legally they have no requirement to do so.. I’m quite impressed at that.

Computer says no.

Posted on
Wed Sep 13, 2017 12:40 pm
CliveS offline
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Joined: Jan 10, 2016
Location: Medomsley, County Durham, UK

Re: Vesternet UK: handle with care

Yes I must admit that I had no idea about the administration, they have just carried on as normal and apart from owing other companies and the VAT man (effectively us as that helps pay the UK bills) I think they grew too fast, have sorted it out and carry on. This thread started the day after I sent the Sensative Strip back so I waited the outcome with interest but as the strip was dead (don't believe it lasts 10 years, I have had 4 out of 6 die in less than 2 years!) I had nothing to loose.

CliveS

Posted on
Wed Sep 13, 2017 3:03 pm
durosity offline
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Re: Vesternet UK: handle with care

Yeah I treat anything that says battery life of 10 years with extreme skepticism.

Computer says no.

Posted on
Thu Sep 14, 2017 5:19 am
johnpolasek offline
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Joined: Aug 05, 2011
Location: Aggieland, Texas

Re: Vesternet UK: handle with care

durosity wrote:
Yeah I treat anything that says battery life of 10 years with extreme skepticism.


I treat everything that says "battery life" PERIOD with extreme skepticism; I consider myself lucky if it lasts half of what the manufacturer claims it will.

Posted on
Thu Sep 14, 2017 9:04 am
Mayhem offline
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Joined: Mar 17, 2014

Re: Vesternet UK: handle with care

That explains a lot. :? :? :?
I have been buying from them for a few years and always had great service but I noticed in the last 6 months they kept having a manic Monday offer on different items but amazingly when I ordered and paid for express shipping it was out of stock so had to wait for two weeks. Always due to "the massive demand generated by the offer".
Me thinks that it was the old "get the money first before buying the stock".

:mrgreen:

Posted on
Fri Sep 15, 2017 12:58 am
neilk offline
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Joined: Jul 13, 2015
Location: Reading, UK

Re: Vesternet UK: handle with care

They have been doing the "Summer Monday Sales" for a few years now and they ran out of stock on a number of those but always honoured the price and delivered in a reasonable time. The note of caution is of course correct and I would make sure any orders are protected by credit card cover but I don't think this in itself is a symptom of anything. This is a real shame as they have always been spot on replacing and supporting what they sell rather than just fulfilling things and they also generate useful supporting documentation and use cases.

The ability to basically fail and restart without apparent implications is of course worrying, and some people have this as their strategy rather than overstretching. Time will tell but great to see them honouring existing customers which the more unscrupulous use this as a way to walk away from all obligations.

They would have historically been my default choice for any orders even if the price wasn't the best but I will be more cautious now.

Posted on
Fri Sep 15, 2017 6:26 am
Turribeach offline
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Joined: Feb 06, 2015
Location: London, UK

Re: Vesternet UK: handle with care

It certainly shows some confidence that they seem to be accepting returns from the pre-administration company as they are in no legal obligation to do so. And while I would have preferred to know about the company ownership change the fact that they seem to be operating like nothing has really happened reinforces the moral argument that they didn't need to tell their customers since in effect nothing has changed for them. Suppliers will obviously know by now, specially the ones owned money. All the others would have had to change invoicing details for the new company (Smartech Holdings Ltd). Aside from this post nobody seems to have written anything about this on the web. Searching for "vesternet ltd in administration" in Google just brings results related to Companies House and other sites scrapping that data.

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