Bill Express

The Bill Express (and related entities) creditors meeting today was fascinating.  In barely an hour plenty was covered:

• The total indebtedness of Bill Express is $209 million.  This may increase by at least $35 million if a claim by CCH is found to be correct.
• Bill Express had 9 employees.  Can you believe that?  The rest of their employees were employed through the Technology Business.  While we knew this, I was surprised that only 9 were employed by Bill Express.
• All the equipment used to run the business including systems holding the company accounts are controlled by Technology Business.  This makes the Administrator’s job almost impossible.
• There is no cash to continue the administration. They are hoping for a Tax Office GST refund or monies to be unlocked from elsewhere so that formal administration can move forward.
• There is a serious question about whether the company was trading while insolvent. This must tb the focus of work being done within ASIC at the moment.   I’d suggest that forensic research would show this to be the case as far back as February this year, maybe before.
• There was an interesting question from a representative of Cuscal about the account holding BOPO customer’s funds being frozen.  The administrator undertook to research this and see what can be done about releasing access to the account.
• Peter McDougall asked the most interesting question on the day – was there consideration to seizing the passports of Directors!
• A committee of creditors was formed.  This is made up of Optus, Vodafone, Telstra, Cuscall, Hutchinson Telecom, ANZ, Peter MacDougall, Capital Finance, ANZ, Don MacAskill from the ANF and myself.  This committee will consider the next steps including offers from parties for parts of the business.

Talking to people after the meeting, the common question is how could such a business collapse.  It was a no-brainer.  Sure the margins on rehcarge are tight.  But manage your cash well and you will be okay.  Cash is where most of the questions about Bill Express lie.  Questionable transactions.  Money flowing overseas?  Paying for assets not registered to the company.  Taking on debt for other entites.

No wonder Bill Express’ suppliers, respected names like Optus, Vodafone and Telstra shake their heads at how what should have been a sound business crashed to a burning heap owing hundreds of millions.

The next week will probably see administrators appointed to OnQ.  Maybe ETT too, the public company 43% owned by Bill Express.  If I am right, this will be three public companies in ruin.  The question then will be where were the regulators in all this?

I am grateful to the 77 newsagents who appointed me their proxy for the meeting.  I received another 10 proxies but the form used was the ANF pre-completd proxy form so I gave these to Don MacAskill of the ANF prior to the meeting.  I received another 17 proxies too late for the meeting.

Newsagents were sent correspondence from the ANF yesterday suggesting that the organisation is acting on their behalf in relation to the lease payments for the now useless Bill Express equipment.  These are the same leases the ANF recommended newsagents sign in 2003/04.

Given that the ANF is not a party to the lease and has no agreement from Newsagents to act on their behalf in this matter at this point, I wonder what their motives are? How can they act on our behalf when we are dealing with a Group of interwoven Companies whereby many are in Liquidation, subject to ASIC, Federal Police and Corporate investigation? I will be interested to see what the legal team representing newsagents has to say about this interference by the ANF.

I am grateful to the newsagent who brought this issue to my attention.

Here is advice for newsagents on how to remove Bill Express hardware. Whether you should remove the equipment or not is a decision you need to weigh up carefully – there is a possibility the network could be running again some day.  Please note that each situation may be different. If you are not sure get a professional to remove the equipment.

• If you use the internet through Bill Express, do not remove any hardware as your internet will stop working.
• All the Bill Express hardware is normally plugged in to 1 or 2 power boards. Turn these power boards off at the power points. Test your point of sale system (all computers), make sure that all printers, all scanners and internet is all working. If anything stops working, turn the power points on and get a professional to remove the hardware.
• If only the Bill Express hardware is turned off, slide out and unplug the IBM computer box. This will have about 4 or 5 cables plugged into the back of it. Once it is completely unplugged, remove it from the counter altogether.
• With the pin pad and the printer on the counter there are 2 or 3 cables plugged into each. Unplug all the cables and remove the pin pads. Feed the cables back into the counter.
• Carefully unplug and pull out the now disconnected left over hardware and cables. Do not cut the ends off the cables. As this would be damaging the cables for which you could have some liability.

The only downside of doing this is that the screens which the Swish group made a fanfare about bringing to its network will no longer work. However, I suspect their ASX announcement was a bit of hot air. Smart newsagents are making good use of the screen and running their own in-store ads.

My understanding is that OnQ, a major shareholder in Bill Express, will slip into administration today or early next week. I’d expect this to be followed by ETT. If this happens, three ASX listed companies will have collapsed as part of the Bill Express mess. Today’s Australian Financial Review devotes a full page to the mess.  The Age also continues its excellent coverage.

The ANF bulletin sent out tonight contains disappointing and false assertions.

The ANF bulletin says: The ANF is aware of a fax that was recently distributed nationally by Tower Systems. The fax contained some misleading and false statements in relation to ANF initiatives on behalf of newsagents.

I say – the ANF bulletin publishes no information which demonstrates that what I published was false or misleading. The claim was made on letterhead from a business representing Suncorp.

The ANF bulletin says: FACT: Touch solutions began talking to the ANF and Tower Systems about providing value added services to the newsagent industry early this year.

I say – this statement is, at best, inaccurate and at worst an outright lie. Tower released the value added services through eziPass in October 2007. The ANF promoted this in its own bulletin. Why then would they try and revise history?

The ANF bulletin says: FACT: The St George help desk provides assistance to both ANF and Tower Systems.

I say – Last week St.George established a separate Tower only help desk in part to resolve the challenges of what look like competing offers – the Tower offer and the ANF offer.
The ANF bulletin says: FACT: The ANF does not receive any commission on pre paid products with Suncorp or St George.

I say – the ANF needs to declare its commission, rebate and or other revenue arrangements associated with mobile recharge, phonecard and other product sales and merchant services transacted. The above ‘fact’ statement is not helpful without full disclosure. If the ANF makes nothing and its to make nothing why are newsagents asked to nominate ANF membership.

Several months ago Don MacAskill acting CEO of the ANF called me late one evening and asked if he could promote the Tower eziPass platform to newsagents alongside an offer from St George and Suncorp in the ANF bulletin. I advised I am okay with this as long as he understands there would be no revenue for the ANF as the Tower work was being done pro bono for newsagents. He agreed. The ANF promoted eziPass in an email that went out that night and once more a few days later. That was the end of it.

Tonight’s email from the association continues its poor track record of service and transparency on Bill Express related matters. I want the ANF to act as an association and not a commercial body.

This public dispute with the ANF is not edifying for them or for me. My issue is that newsagents deserve better representation. Te ANF had a great opportunity several months ago to start afresh. It did not choose this course and has had to spend much time since defending the indefensible about Bill Express.

The ANF announced to its members on Tuesday that the ANF (acting?) CEO met with the Bill Express Administrators on Monday. They provided a Q&A about issues discussed at the meeting – suggesting they are on top of the Bill Express issues and that they have information from the Administrator. Why, then, did the ANF only discover today that they creditors meeting is to be held tomorrow? I suspect the first the ANF heard about the creditors meeting was at this blog. The Administrators letter to creditors is dated July 10. If I was meeting the Administrator Monday I would have made the claim then about newsagents being creditors.

VANA sent out a communication to newsagents today saying that newsagents should send proxies for the ANF if newsagents are owed commissions.  This is not well thought through.  Every Bill Express newsagent who has taken a bill payment between February and when the company collapsed is owed money because of the Bill Express decision to hold back bill payment money for a marketing fund.  This is different to recharge commission.

The ANF has today faxed to newsagents calling for them to vest their proxy to the ANF. I have a problem with this given the role of the ANF in promoting Bill Express to newsagents in the first instance.

Any newsagent wanting me to act as their proxy at the creditors meeting tomorrow should email me mark@towersystems.com.au. The deadline for us having the proxy form is noon tomorrow. We can arrive at the meeting with these.

Bill Express has apparently appointed Debtsec Pty Ltd to collect money from newsagents which may be owing for phone recharge product sold through the Dialtime terminals.  Debtsec has written to newsagents advising of their appointment and indicating the amount owed.  In at least one instance, the amount Debtsec has asked the newsagent to pay to them as at July 13 was taken by Bill Express from the Newsagent’s bank account four days earlier.

Click here to download a copy of the (1MB) 22 page document issued by PPB, Administrators of Bill Express. The documents include details of the creditors meeting to be held at 1pm tomorrow in Melbourne at the Marriott Hotel. Click here for a smaller file containing the proof of debt and proxy forms. I will be attending the meeting with our Financial Controller.

Newsagents are creditors of Bill Express because the company has withhed 20% of our previously agreed Bill Payment revenue to be spent on a marketing campaign which never materialised. They also withheld 10% of our revenue for administration costs which I would consider is an amount we could dispute. To calculate the amount Bill express owes you calculate the number of bills paid between February and when Bill Express died and multiply this by 20 cents.

Like 3,500 other newsagents, I am a creditor of Bill Express. I am disappointed to read in The Age today of a creditors meeting tomorrow at Melbourne’s Marriott hotel. The Administrator ought to have advised newsagents of this meeting. I plan to attend.

As I blogged on June 14, Bill Express owes me close to $2,000.  This has accrued since February 2008 when the company started withholding commission it owed on Bill Payments precessed in my newsagencies.  The portion of my commission it withheld was to be used for marketing the service.  This marketing was never done.  Therefore, I and 3,500 other newsagents are creditors.

Click here to download advice we faxed to newsagents yesterday on Bill Express. We put this together based on the many questions newsagents still have about the fall out from the Bill Express mess.

The following advice is provided by Blackhawk for newsagents where their Gift Cards were offered through the Bill Express / Dialtime package:

All merchants who were selling Gift Cards, and have been effected by the DialTime terminal’s going down, please hold onto your stands, as an alternative connectivity is being developed which is a few weeks away from being available for their use. Please feel free to contact us on info@bhnglobal.com, which will also provide a clear channel for all future communication on their Gift Card Stands.

Gift Cards are huge business in the United States.  We are several years behind in embracing this opportunity.

The ANF has changed its advice on the Bill Express direct debit but its recommendation remains unclear. NANA and the QNF are having no such difficulty in providing advice to their members. The level advice from the QC who has prepared the Class Action is that newsagents should not continue to pay for the lease of the equipment, advice that newsagents cancel the direct debit. Newsagents ought to get their own advice on this, I provide information here as to the advice provided to QNF and NANA members for information only.

It has been suggested from people who would know something of the sale of the Technology Business International debtors to Mobius, part of Allco, that great care was taken on the appropriate structuring of the transaction. I guess this is part of what will ultimately be tested in court.

With the collapse of Bill Express, many people have been left without the ability to load funds on to their BOPO card to make payments. To assist BOPO cardholders, SCX Global is offering a free CANVAS Prepaid Visa Card, for a limited time only, when you apply online. Simply enter loadcashplay in the promotional code when applying online for a $1000 CANVAS card and SCX Global will waive the purchase fee.

CANVAS Prepaid Visa Card allows you to shop and pay wherever Visa prepaid is accepted (the same as BOPO). CANVAS currently has a reload network of over 1500 stores including the ability to load via BPay.

You can apply for the CANVAS card at www.mycanvascard.com.au.

Newsagents can sell CANVAS cards directly to consumers by having physical cards available for sale in store thanks to our eziPass platform. Visit the eziPass website for details on how you can sell Visa Prepaid cards including Gift cards, Money Transfer cards and online shopping Virtual Visa cards.

UPDATE:  Anyone who applied today using the promo code and was asked to pay to contact CANVAS customer service on info@mycanvascard.com.au and they will gladly process / refund any payment for free.

A colleague sent me this photo of a Bill Express screen advertising the BOPO card in a newsagency tonight. Newsagents have not been told to turn off the screen. The BOPO ads have not been stopped.

While I am no lawyer, for what it’s worth I’d suggest that all newsagents turn off their Bill Express advertising screens – otherwise, as the photo shows, you are likely to be advertising a dead product.

As a result of my blog posts here about BOPO I’ve had calls from BOPO customers upset that money they just loaded is inaccessible to them.  The BOPO website is completely helpless in this area – it ought to provide advice to these customers.

With more newsagents disconnecting their Bill Express equipment, the challenges for the Administrator of Bill Express and liquidator of Technology Business International are considerable.  While the equipment is installed and on the counter the equipment can be quickly identified.  Once it is in a box and put in the backroom of a newsagency it is likely to get lost.

In my newsagencies we are removing the equipment and un-cluttering the counter.  Since we have technology experience it is easier for us than others.  It is a service we may offer others who want to do the same.  Anyone with basic computer skills can handle this.

On the Bill Express screens, I’d love to hear what the Swish group think about this.  Their last announcement to the ASX about the Bill Express screens (in April) was that they were thrilled to have the Bill Express screens added to their network.

Newsagents are getting swamped by telemarketers promoting eftpos and mobile phone recharge offers.  I am hearing reports that some telemarketers are being overzealous in representing their offers, even claiming they are part of one group when they are not.  For the record, no telemarketers are calling at present to pitch eziPass or the St.George offer I brokered.  Newsagents signing up with St.George or Suncorp as a result of telemarketing are entering sa relationship which provides commission to the ANF.

Newsagents are getting questions from customers about their BOPO cards and, in particular, how they can use the BOPO service.  Cuscal, the financial institution behind the Bill Express BOPO product issued a helpful statement on Friday last week.  They also provided a diagram to help BOPO customers understand where their cash may be depending on when they loaded to their BOPO card.

While the administrator has BOPO and other Bill Express assets for sale, BOPO is tainted goods and probably of little value.

While two of the BOPO companies, BOPO Cards Pty Ltd and BOPO Cards (Australia) Pty Ltd have had administrators appointed,   BOPO Cards (International) Pty Ltd has not.

The Queensland Newsagents’ Federation is providing unbiased professional advice to newsagents on pre paid product options, eftpos processing options and steps to take in relation to the Bill Express direct debit. Importantly, the QNF declares that it does not receive any commission or rebate of any kind.

This is how an industry association should act. Maybe they should consider inviting newsagents from outside Queensland to join?

Ray Hadley gave the Bill Express story a good run on Friday. You can here a couple of clips from the shop at the 2GB website. Listen to the interview Ray did with Don MacAskill the Acting CEO of the ANF. Don does not answer some of Ray’s questions. For the record, I note:

1. The ANF banked in excess of $1 million from Bill Express.
2. The ANF staff actively promoted Bill Express.
3. The ANF published industry journal actively promoted Bill Express – editorial independence on Bill Express was sold by the ANF to Bill Express.
4. Not one article in the journal indicated to newsagents that the ANF had a commercial arrangement with Bill Express. Newsagents did not know about the secret commissions being paid.
5. The ANF earned a success fee for every site signed up on top of money from each bill payment.
6. I cannot find any evidence of ANF undertaking due diligence of the contracts newsagents signed.
7. The ANF has now endorsed other suppliers (of banking and related arrangements) for which it receives, reportedly, 40% of the available commission – newsagents get 60%.

Ray hadly has helped newsagents tremendously by giving this story airtime. It is important that newsagents talk to their local radio stations and other media outlets to ensure that this story continues to get attention.

In the wake of the collapse of Bill Express, Access phonecards can send you physical $10, $20, $30 & $50 calling card stock overnight. Newsagent commission is 30%. These can be used for calling just about any country and rural Australia. These cards will tide you over while eziPass or other paperwork is processed. Email info@accessphonecards.com.au or call 1300 667 017 or go to www.accessphonecards.com.au and click the retailer section.

Disclosure: I am a shareholder in in Access phonecards.

Tower Systems has increased support coverage today to help answer questions about eziPass. The Help desk can be reached on 03 9524 8000. Our usual after hours numbers are on as well.

The Motorlink fuel card, which is part of the OnQ business and through them related to Bill Express, appears to have collapsed yesterday. I have been told that people presenting the card to pay for fuel in a petrol station have the card declined. A call to Caltex says the card is dead. With thousands of cards on issue, I am surprised that there has not been any media coverage of this.  Motorlink is the fuel card previously recommended by the ANF.

Motorlink Systems Pty Ltd has one shareholder – On Q Company Pty Ltd.