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Bogus Certification

On the 18 July (1997) Quality Assurance Systems Ltd (QAS), a nonaccredited certification body, was successfully prosecuted by Northamptonshire County Council Trading Standards Service for offences under the Trade Descriptions Act 1968. The offences related to the issue of registration certificates containing false statements that firms had been assessed and approved to ISO 9002. David Hedger, the main investigating officer at Northamptonshire Trading Standards, reports...

During February 1996 Northamptonshire Trading Standards received a complaint from a small firm of precision injection moulders based in Brackley, Northamptonshire (UK). The company had been approached by QAS in 1995 offering to supply quality and procedures manuals and registration to ISO 9002.

The QAS advertising leaflet offered 'ISO 9000 certification within 30-60 days' and stated that 'QAS Ltd was specially formed to help meet the increasing needs of small and medium-sized companies'. Under the heading 'what we do' it described its modus operandi in three ways:

  • our experienced auditors look with you at your company's key activities relevant to satisfying your clients'/ customers' quality requirements. A programme dealing with any areas where your existing systems does not comply with the standard will be agreed
  • once QAS is satisfied your systems conform to ISO 9000, your company is placed on the QAS register and you will receive your quality and procedures manuals together with your certificate
  • all such certificates are valid for a maximum of three years subject to a satisfactory external audit carried out by QAS annually in order to ensure the required standards are maintained, the cost of which is £350 plus VAT

This document appeared to be indicating that a registration certificate would be received at the same time as the manuals.

The proprietor of the business confirmed that this is what happened. He stated that a QAS auditor had spent two to three hours with him, asking him, among other things, to explain the operation of the business including processing a customer enquiry through to the supply of the finished product. The auditor then went away returning two to three weeks later with manuals, the registration certificate and an invoice for £1,175.

The registration certificate stated that: 'this document certifies that the quality adminstrative systems of XYZ Ltd have been assessed and approved by QAS Ltd to the following quality management systems, standards and guidelines -- ISO 9002 : 1994.' There was a clear conflict between QAS supplying the manuals and certificate together and ISO 9002 clause 4.2.2b, which stipulates that the supplier shall effectively implement the quality system and its documented procedures.

Suspicion and investigation

It was difficult to see how the business could have effectively implemented a documented system it had never had the opportunity to read in depth. The proprietor confirmed that he was running the business in essentially the same manner as when he received the registration certificate some seven months earlier. Through further discussion it was apparent that a management review and internal quality audit had never taken place. The manuals referred to master gauges that did not even exist.

In order to prove our case beyond reasonable doubt two IRCA-registered auditors were hired by Northamptonshire Trading Standards to carry out an audit of the business. They spent a day at the business and concluded that: 'it is the opinion of the assessment team that the manual and procedures as prepared by QAS Ltd do not truly reflect the operations of the company. The manual has been written to follow the standard, and with a few exceptions it does do this. However, whilst the manual should specify what has to be done by the company, the procedures must show how this is being done. Quite clearly this has not been achieved since the majority of the procedures state that the company is carrying out quality actions which it is not doing. Even worse is the fact that some of the procedures have never been operated, before or since certification. The essence of any quality system is that its documentation describes what is being done and any certification issued is as a result of an assessment that this is the case. It is therefore impossible to see how the company could have justifiably been certificated as operating a quality system to the required ISO 9002 standard.'

The complaints flood in

In May 1996 a second complaint was received from a window manufacturing company in Corby. Its experiences with QAS were similar except that they had written to QAS to formally cancel the contract following the first visit by the auditor. The company realised the service it was receiving would not meet its requirements. Despite this QAS sent the manuals, certificate and an invoice by post. The company had no intention of implementing the QAS written system nor was there any possibility of auditing the documented system in operation.

An e-mail message to other trading standards services in the UK uncovered further complaints which were then referred to Northamptonshire Trading Standards through the remainder of 1996. Witness statements were obtained from the complainant firms confirming that they had not implemented many of the documented procedures and that the QAS written system often did not reflect their actual working practices. Some firms' manuals contained pages headed with a different companies name. In three cases the firms complained to the British Standards Institution (BSI). As a result BSI auditors visited the firms to carry out an initial assessment. The conclusion in each case was that the company did not meet the requirements of ISO 9002 and that a proper assessment of the business would have revealed this.

The provisions of the Trade Descriptions Act 1968 apply to all certification bodies whether acccredited by the United Kingdom Accreditation Service (UKAS) or not. The statement on the registration certificate that QAS had assessed and approved the firms to ISO 9002 was clearly false as no assessment of the documented system had taken place. In some cases the documented system was inadequate to meet the requirements of the standard. QAS was unable to produce any documentation to indicate that an assessment of the system in place had occurred.

There were no audit records or reports as one would expect from the requirement of BS 7229: 1991; ISO 10011: 1990. Training of auditors was also inadequate. QAS had been reckless -- without records of audit how could it know whether the statements on the certificate were true or false. Having established that offences had been committed regard had to be given to the defences contained in section 24 of the Trade Descriptions Act.

QAS stated that the issue of a registration certificate was reliant on information provided by the auditor that the business concerned met the requirements of ISO 9002. However, to satisfy the defence it was necessary for QAS to also show that it took all reasonable precautions and exercised all due diligence. The lack of audit records and inadequate training of auditors were two examples of areas in which it could not satisfy the defence. In order to satisfy the defence it is necessary to set up a system to avoid the commission of offences and then carry out checks to ensure the system works; not dissimilar to the principles of ISO 9002. Auditors can also commit offences via section 23 of the act where its employer's false statement can be shown to be due to their act or default. It was decided not to prosecute the auditors on this occasion.

QAS faces up to the truth

QAS entered a guilty plea to the six specimen offences put against it under section 14(I)(b) of the Trade Descriptions Act 1968 at Towcester Magistrates Court in July. The company directors, Michael Bright and Geoffrey Livesey, also each entered guilty pleas to a specimen offence.

This was for consenting as directors to the false statements by signing the registration certificate, contrary to section 20 of the Trade Descriptions Act 1968. QAS was fined £1,500 on each offence, ordered to pay £3,525 compensation to one company and ordered to pay Northamptonshire Trading Standards costs of £2,015. Bright and Livesey were each fined £1,000 and ordered to pay costs of £256. QAS also undertook to refund the fees of four companies where the prosecution withdrew the charges.

It's time for legislation

A number of firms which complained about QAS found it astonishing that anyone could set up trade as a certification body. They felt that there should be mandatory, not voluntary, controls in place to oversee and maintain the integrity of the ISO 9000 registration process. While action can be taken under the Trade Descriptions Act 1968 this is always after the event and far too late for many businesses which may have fallen foul of poor-quality certification.

There is a need to protect legitimate businesses from substandard practices. Small firms cannot be expected to have the knowledge or resources to fully investigate the different types of ISO 9000 registration available or the credentials of potential certification bodies. They should be able to be confident that the service they receive will meet the required standards. The work of all certification bodies should be overseen by an independent body thus plugging the loophole which currently exists. In this way confidence in the standard will be maintained and poor practice will be prevented. There will still be the need for trading standards to police false or misleading claims of ISO 9000 registration by businesses which are not registered firms or whose registration has lapsed.

The prosecution should act as a reminder to all certification bodies of the need to operate in a fair and diligent manner.

The professionals and the guilty talk back

The Association of British Certification Bodies (ABCB) applauded the successful court action against QAS. ABCB said it hopes the action will send a powerful message to nonaccredited certification bodies and companies seeking certification.

QAS also issued its own press release to try to explain the court action. It stated that: 'QAS very much regrets the circumstances which led to the recent court case brought by Northamptonshire Trading Standards. The case arose out of events which occurred during the formative period of the company in 1995 when, with the benefit of hindsight, the company clearly employed auditors who were not properly qualified.'

Northamptonshire Trading Standards confirms that it is in dialogue with QAS as it attempts to put its house in order. QAS say that the auditors involved in the inappropriate certifications have now been sacked.

What to do if you are worried about your QAS Certification

Northamptonshire Trading Standards are reluctant to issue a broad comment on all certifications issued by QAS - each has to be judged on its own merits. It suggests that companies should consider whether they have implemented the procedures of ISO 9000 and whether they accurately reflect working practices. Companies who feel they have been misled can bring action through the county courts. Further details can be obtained from Northamptonshire Trading Standards on 01604 761123 or your local trading standards office. For details on whether a certification body is accredited call UKAS on 0181 943 6958.

The provision of the Trades Descriptions Act 1968
Section 14 of the Trade Descriptions Act 1968 relevant to the prosecution of QAS states:

It shall be an offence for any person in the course of any trade or business

(a) to make a statement which he knows to be false; or
(b) recklessly to make a statement which is false; as to any of the following matters, that is to say: (i)the provision in the course of any trade or business of any services, accommodation or facilities
(ii)the nature of any services, accommodation or facilities provided in the course of any trade or business
(iii)the time at which, manner in which or persons by whom any services, accommodation or facilities are so provided
(iv)the examination, approval or evaluation by any person of any services, accommodation or facilities so provided; or
(v) the location or amenities of any accommodation so provided
(2) For the purposes of this section:
(a) anything (whether or not a statement as to any of the matters specified in the preceding subsection) likely to be taken for such a statement as to any of those matters as would be false shall be deemed to be a false statement as to that matter; and
(b) a statement made regardless of whether it is true or false shall be deemed to be made recklessly, whether or not the person making it had reasons for believing that it might be false

Defences in section 24 of the Trades Descriptions Act

In any proceedings for an offence under this act it shall, subject to subsection (a) of this section, be a defence for the person charged to prove:

(a) that the commission of the offence was due to a mistake or to reliance on information supplied to him or to the act or default of another person, an accident or some other cause beyond his control
(b) under that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person his control

Biography

David Hedger is a principal trading standards officer with Northamptonshire County Council Trading Standards Service. He investigated the complaints against QAS and compiled the report upon which the prosecution was based. Prior to becoming a trading standards officer he obtained a BSc in management science at the University of Warwick. To qualify as a trading standards officer it is necessary to pass the 13 paper diploma in trading standards. One of these papers is dedicated to quality assurance. Northamptonshire Trading Standards Service obtained registration to ISO 9002 with BSI during 1994. The experiences of this process were invaluable during the investigation.