Author: Mark Fletcher

I received more calls today from newsagents dealing with banks which refuse to act on their instructions to cancel direct debit arrangements for Bill Express equipment. ANZ and Westpac are the banks letting newsagents down based on today’s calls. In each case, newsagents had put their direct debit cancellation in writing and in each case their respective banks had refused to act. Thankfully, one the Westpac branch relented after the newsagent went in with information about the Code of Banking Practice.

The behaviour of banks is appalling on this matter of the Bill Express equipment. The ASIC website is clear on bank obligations as is the website for the banking Industry Ombudsman. It is as if staff in local bank branches have not heard about their obligations. Newsagents are having to go back two and three times before getting reasonable attention.

Time is an issue here since the next round of debits are to be made less than a week from now.

I attended the second creditors meeting of Bill Express and twelve related companies in Melbourne this afternoon. The key resolution of the meeting was to put the companies into liquidation.

Leading up to the decision to liquidate the businesses, the creditors meeting heard further detail of the mess the business created for itself through an unnecessarily complex structure, lack of transparency, inadequate control and questionable business practices.

One comment which interested me was that Directors thought negative media commentary played a part in the downfall of the company.  I am not aware of any negative commentary which was untruthful.

The only glimmer of financial hope for secured creditors such as the ANZ bank is a sale of the business. 7-Eleven has some time left on their exclusivity arrangement around this. For their bid to go anywhere, they will need supplier and retail network support. It will be interesting to see how newsagents react should 7-Eleven get to the point where they are ready to ask the question.

The ACCC and ASIC have active investigations into various aspects of Bill Express. I hope that these are fruitful as they may help provide closure for newsagents. I would also hope that formal interviewing of Directors around the question of possible insolvent trading and dubious transactions is useful.

Today’s meeting was funereal in mood as one would expect.

There is no good news in this – hundreds of millions of dollars lost by ANZ, Optus, Vodafone, Telstra and others and the considerable potential future losses of tens of millions by newsagents relating to Bill Express equipment lease.

I hope that anyone associated with the Bill Express business who is found to have breached their obligations is brought to account.

The ASIC website has a sample of the letter you can send to a bank to cancel a direct debit. Here is a modified version of that letter for use by newsagents in relation to their Bill Express equipment lease. This sample was distributed by the QNF to its members yesterday.

[Your letterhead or postal address]

[Date]                                                                                     

[Name of bank, building society or credit union] [Address]

Dear Sir/Madam

Cancellation of direct debit

I refer to my authority to [Insert name of merchant and your account or reference number  with them] to direct debit my account [insert your bank account name and number] for $544.50 (including GST) on or around the 25^th of each month.   I hereby cancel this direct debit authority, effective from [insert date],

Would you please confirm in writing that you have forwarded this cancellation instruction to the merchant’s sponsor bank and that you will make sure no further amounts are debited from my account under this direct debit authority from [insert date as in paragraph above].

Yours faithfully,

(Your signature, name etc.)

Newsagents involved in the NSW class action were advised more than two months ago to cancel their direct debit.  The ANF changed its mind on the direct debit can called on newsagents to suspend direct debit arrangements for Bill Express equipment twelve days ago.

It is important newsagents ct this week given that the next account sweep is due in under two weeks.

The Age today runs the second part of it’s investigative piece on Bill Express.  It is interesting, but not surprising to see that art least one Bill Express Director blames newsagents, in part, for the collapse of the company.

Westpac is another bank where at several branches newsagent requests to cancel direct debit arrangements for Bill Express equipment have been refused. Since my post yesterda about National Australia Bank I received two calls from newsagents complaining about Westpac.

Your bank cannot refuse to cancel a direct debit. To do so is a breach of the Banking Code of Prctice. Here are some steps you could consider if they refuse:

• Read the information at the Banking Industry Ombudsman website about cancelling direct debits.
• Also read about the banking dispute process.
• Research the process at the Financial Ombudsman Service – this is where you would formally lodge your banking dispute.
• Write to your bank branch noting their refusal, include the date, time and the person to whom you spoke. Ask that they put their refusal in writing within 24 hours so you can escalate the issue within the bank and to the the appropriate authorities. Also ask for a copy of the instructions on which they are operating in taking this money – most likely you will find that the instructions you signed to not match current withdrawal arrangements.
• Different banks have different processes, make sure you understand yours. However, always remain in control and demanding on time. Some newsagents have achieved refunds in one or two days.
• 24 hours after your letter, write to the state manager advising that you are lodging a dispute with the bank. Give a copy to your local branch. This is when banks generally realise that they have made a mistake.

I am happy to list banks here which are refusing to refund money which was taken from newsagent accounts against their explicit instructions.

Mark Hawthorne and Jesse Hogan shed more light on the Bill Express mess in part one of a two part excellent report in The Age today.  While the report will not help newsagents financially, it will help us understand the extent to which we were duped.  It is also good to see further detail on the interest being shown by ASIC – they now have a five member team on the case.

For newsagents, the Bill Express mess will not end until there is closure on status of the equipment rental agreements newsagents entered into with parties associated with Bill Express.  My understanding is that newsagents owe around $20 million.  Many newsagents have cancelled direct debit arrangements and face a showdown with the finance company, Mobius.

While there have been threats of legal action against newsagents to recover lease payments, none has been commenced to my knowledge.  The group of newsagents behind the Class Action are ready to defend any action by Mobius on this front.   Any newsagent being pursued should know that fellow newsagents will rally to support mounting a defence.

Personally, I am lucky with Bill Express.  I signed a four year equipment lease.  Yes, I did not thoroughly read the agreements.  I joined late and expected others had.  Dumb, I know.  My equipment contract ended at the start of this year.  They tried to get me to sign an extension for the plasma advertising screen they installed – I was one of the first trial sites.  I refused to pay – the $5,000 charge for a screen which cost under $1,000 to purchase was nonsense.  Also, by that time, I was skeptical of the model and some of the practices being used by the company.  Bill Express never pursued me.

My personal position aside, I will help any newsagent out of the Bill Express mess in any way I can.