Bill Express

The next 24 hours will reveal how successful newsagents have been at stopping payments for their Bill Express equipment being taken from their accounts. While newsagents have been advised for three months to cancel direct debit arrangements, some had not because the Australian Newsagents’ Federation, until a couple of weeks ago, published contrary advice (without having legal advice to back this).

I expect that some banks will have not followed account holder instructions and allow payments to proceed. Any newsagent in this position needs to know that many have successfully clawed back the money taken by their bank for Bill Express equipment lease payments.

PPB, the liquidators of Bill Express have announced the sale of their shares in ETT in an off market transaction.

7-Eleven has sent a fax to newsagents today suggesting that they do not commit to any long-term contracts with alternative suppliers should they wish to have the option of resuming the Bill Express service.  The letter advises that they expect to know if it is possible for them to take on the business and resume operations within weeks and that they would try and get the network operating shortly thereafter.

I suspect that this communication is reaching newsagents and other merchants too late.

More newsagents are replacing the Bill Express ad in their lightbox with a more relevant offer. No point promoting a dead brand.

If you do this, be sure to use a material which is appropriate for the lightbox.  Most printers can help with this.

Someone should let the folks at Breeze, the tag part of the new Eastlink tollway in Melbourne know that Bill Express is dead. Here is text from a letter they just sent to a new account holder promoting payment at Bill Express outlets:

eTravel Blackboard reports that Flight Centre is caught in the Bill Express mess having apparently paid Technology Business International for terminals which were never delivered.

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.

Mark Hawthorne at The Age has more information on the possible purchase on parts of Bill Express by 7-Eleven.

Footnote: the Bill Express / Dialtime terminal offered for sale on eBay four days ago has been taken down.

Any newsagent encountering difficulty in canceling a direct debit through the ANZ for their Bill Express equipment should know that the official ANZ position as being fed through their PR people is that the bank will cancel direct debits in line with customer instructions. If any more newsagents have trouble canceling direct debits please let me know by email at mark@towersystems.com.au.

AAP is reporting that 7-Eleven is looking at acquiring some of the assets of Bill Express.  There is no indication in the reports published so far as to what any successful purchase by 7-Eleven may mean for newsagents.

I have been contacted by several newsagents over the last two days who have found it particularly difficult to cancel direct debit arrangements for their now useless Bill Express equipment. In each case their bank, the ANZ, has refused to act on their written instructions. My understanding is that this is a breach of the Australian Bankers’ Association Code of Banking Practice. It will be interesting to see whether a formal complaint to the Financial Ombudsman Service can resolve the disputes.

To balance this I would note that several other newsagents have been refunded amounts taken by their bank after they canceled their direct debit arrangements.

Further to my post on Friday, Mark Hawthorne reports in The Age today the details of what was presented to the committee of creditors at Friday’s meeting.

I received a call yesterday from a newsagent who had not stopped the direct debit arrangement for the Bill Express equipment because of advice from the Australian Newsagents’ Federation. She rang me after reading the advice from the ANF three days ago that newsagents suspend the direct debit arrangement. She was in tears at what she calls at least two months of “lost” payments. As she explained, the two months payments was more than a year of ANF membership fees.

Her story is not uncommon. She went into Bill Express on the advice of the ANF and, in her words, has always done what they told her.

In a business with annual sales of $345,000 and a net profit of under $20,000, the $6,534 a year in Bill Express equipment rental fees for no return will be a huge cost. This is why she was in tears. As she put it to me, had she ignored the advice of the ANF and listened to other newsagents she would have stopped the direct debit earlier and saved, maybe, two months of payments.

My caller told me that when she spoke to the ANF twice about this they were adamant that she should continue to pay for the equipment and that they had legal advice newsagents should do this. She tried called the ANF Friday but could not speak to anyone who knew why they changed position.

My understanding is that the ANF did not receive any different legal advice before it revised the advice it provided newsagents on Thursday to “suspend” direct debit arrangements for the Bill Express equipment. I hope I am wrong and that the Board issued the changed advice based on new legal advice and not political expediency.

While some on the Board will not like this blog post – it is more of the “third party commentary” they criticised on Thursday – the questions I post warrant answers. Did the Board get new advice? If so, what are the details? If not, why did the Board take the u-turn on Thursday and why not sooner? It would appear that the ANF Board has misjudged the mood of their constituency on the Bill Express matter.  The Chairman said most West Australian newsagents were not affected when he spoke to a group of newsagents in Melbourne earlier this week.

I know I should welcome the u-turn by the ANF and focus on next steps. The call I received yesterday does not permit that. While I get calls about Bill Express daily, yesterday’s was highly emotional. The cost could lead to the owner shutting the business and walking away such is her trauma of the financial situation and being let down. I felt helpless in listening to her situation.

I have told people at the ANF and at VANA of these calls.  Others have told them too.  Many newsagents cannot afford to have to pay for equipment from which they can achieve no return.  They feel let down for having been told that Bill Express by organisations they trust only to find that those organisations had not done their homework.

Hopefully the ANF will better explain its advice this week and ensure that its staff are well equipped to explain this to callers. Newsagents need certainty. They also need to know that their national association has empathy for their position.

What has happened to newsagents over the last few months with Bill Express is a crime. Newsagents need to see justice pursued by ASIC, the ACCC, the Administrator and any other avenue so that the closure which is important to victims of crime can be achieved.

I participated in a meeting organised by the Administrators of Bill Express this morning.  Newsagents who have registered as creditors should receive a report from the Administrators in the mail next week.  This will detail progress to date.  Confidentiality precludes me from publishing anything discussed at the meeting.

The Australian Newsagents’ Federation today did a u-turn in advising newsagents to suspend direct debit authorities for the Bill Express equipment. They also said that their goal is the dissolution of the equipment rental agreements and that the present ANF Board had been placed in a complicated situation.

Today’s communication matches what I put to the Chairman and Deputy Chairman when I met with them, at their request, at the VANA offices on Tuesday this week. I explained the flaw in their approach to then of trying to negotiate a deal with Mobius on a discount on the equipment rental agreement. I was pleased to see the ANF u-turn. However, I suspect that my advice to them on Tuesday was not the first time this advice had been given to them.

It is important the ANF now disclose what they are doing to seek the dissolution of the Bill Express equipment agreements given that up to Tuesday, nothing was being done or had been done on this. Until then, their focus had been on negotiating a discount on the amount newsagents owe.

The ANF today also said:

We are also deeply concerned that there is third party commentary and we see this as serving no ones interests. This continues to fragment our industry.

Given the performance of the ANF, third party commentary such as my posts here and the comments of others serves newsagents well. If newsagents had relied only on the ANF then many would have paid one or two months of direct debit payments and the ANF probably would not have changed its position as announced today.  Sure I am critical of the ANF from time to time. They could take this as an indication that I think the organisation has an opportunity to be relevant.

Debate is healthy. It does not fragment the newsagency industry.