Bill Payment

I estimate that newsagents currently ‘owe’ somewhere between $15 million and $20 million to Technology Business International for the equipment used in-store for the Bill Express Dialtime bill payment / phone recharge service.

Most newsagents entered into their lease agreements for this equipment expecting that they would never have to pay the lease costs thanks to rebates offered by the company.

The removal of the rebates by the company in February left newsagents out of pocket for the fees for the first time. hence the interest in the network wide ‘liability’.

I wonder how this all plays out when the future of the company is being considered. While Bill Express probably unlocked the total value of the lease early on, I would not be surprised if there was some liability from the company to the financier in the event of a mass newsagent revolt or some other issue around the monies being paid.

$15 million to $20 million is an amount newsagents cannot afford to lose. This is why I support Federal Court action to challenge the actions of the company and others which has left newsagents in this precarious position.

Seventy newsagencies were represented in a meeting held in Melbourne yesterday to discuss Bill Express and the company’s removal of marketing subsidies which it used to promote the service into newsagencies. One hundred newsagents apologised in advance of the meeting for not being available to get away from their shops.

The newsagent-only meeting opened with three brief presentations:

• A summary of activity around Bill Express relating to its future.
• A summary of ACCC investigation into matters around representations to newsagents prior to their signing of agreements to take on Bill Express.
• An outline of proposed Federal Court action commenced by a group of newsagents convened through NANA and being prepared by Melbourne based QC Charles Sweeney and briefed by former General Manager of the ACCC and Barrister Hank Spier. The proposed court action is to focus on three respondents: Bill Express, Technology Business International and the Australian Newsagents’ Federation.

What followed was a discussion about the various options available to newsagents including the legal action proposed by the ANF against Bill Express over the contracts newsagents have with the company.

Some newsagents spoke to their specific circumstances, highlighting the difference in agreements and terms around Bill Express and related contracts with newsagents. Others spoke about the issue of due diligence of the agreements before they were put to newsagents. Others spoke to their contact with the company over the last six months and the challenge of accessing information necessary to them protecting their interests.

Concern was raised as to why VANA had not acted on this matter for Victorian newsagents. Ron McKinnis, VANA Chairman, spoke to the meeting, took on board the concerns raised about VANA apparent inaction and committed to taking these back to VANA.

While newsagents attending were angry and hurt at the serious financial situation they are in over Bill Express, the meeting was cordial, productive and co-operative.

All bar one person attending the meeting voted to support the Federal Court class action which has been commenced by NANA. The details of these newsagents have been provided direct to the legal counsel for inclusion in the list of newsagents prepared to financially support the action. The legal team will be in direct contact about progress of the matter through the Federal Court and assistance they may require – either financial or evidentiary as necessary.

We anticipate having a process established for other newsagents who want to offer direct support to the legal team in the same way.

The benefits of the NANA instigated Federal Court action already on foot over the proposed ANF action, as put to and discussed at the meeting yesterday are:

• It is independent of any party which may have a conflict in this matter.
• Work on the case is well advanced.
• Newsagents are not required to join any association to be part of or to support the action.
• No Association is controlling the agenda or briefing legal counsel.

In the course or organising the meeting Adam de Jong and myself took many calls from newsagents in tough circumstances. There were tears of stress over the financial hardship they now find themselves in over Bill Express unilaterally changing the terms of their agreement. While these stories were difficult to listen to, they reminded us of the personal impact the actions of Bill Express is having. They redoubled our commitment to yesterday’s meeting and ensuring that newsagents achieve a just outcome from the Bill Express mess.

The Queensland Newsagents’ Federation has organised a meeting for Tuesday June 24 at 3pm at the GNS offices to advise attendees about avenues of possible relief open to them. The announcement sent says, in part:

At that meeting we will be actively advising any newsagent who may wish to know how to join the NSW newsagents sponsored class action.

Taking in excess of 50 calls from newsagents yesterday about the Bill Express matter, I know the financial hardship and emotional pain the Bill Express situation is causing many families. Newsagents feel misled and are prepared to bind together to fight for a fair financial resolution and for those responsible to be held accountable.

VANA sent a fax to Victorian newsagents yesterday saying it was not involved in the newsagent meeting tomorrow about Bill Express. They could have been involved but they chose not to – probably because their agreement with the ANF precludes them acting against the ANF.

The ANF is pursuing one avenue of possible legal action on the Bill Express matter. There is advice to suggest newsagents may be well served with taking a less restricted view.
If you are a Victorian newsagent and you have Bill Express then I urge you to attend the meeting tomorrow:

Thursday June 19 at 11am
Crest on Barkly Hotel, Barkly Street St Kilda

There is news to report about a possible legal case based on advice which has not been nobbled. Thre is also news to report on ACCC activity around the Bill Express issue.

For more further information, please contact: Adam de Jong, Romsey News and Lotto. Mobile 0417 383 730 or Mark Fletcher, newsXpress Forest Hill. Mobile 0418 321 338.

The phones have run hot today following the announcement of a newsagent only meeting in Melbourne this Thursday, June 19, to discuss Bill Express. The most common feedback is – at last newsagents are doing something. Some newsagents who cannot make the meeting are pledging an amount they are happy to contribute to independent legal representation.

Bill Express (BXP) owes me close to $2,000 in unpaid fees for each of my newsagencies. These debts are growing by an estimated $500 a month across the two businesses. In the four months that Bill Express has not paid the Advertising Rebate it guaranteed in writing in 2003, its indebtedness to newsagents for this has increased by at least $3 million. Its indebtedness is considerably higher if you add in the rebate tied to the equipment lease – estimated to be at least $3.5 million.

While the Bill Express directors will argue to the ANZ and other key creditors that they do not owe the money to newsagents, courts will be left to decide that. Newsagents are stumping up cash to fund various legal moves against Bill Express. With in excess of $6 million at stake and this accruing by more than $1 million a month it is no wonder newsagents are prepared to fund legal action.

My speculation is that the question over the company’s growing financial exposure to newsagents is one reason their mooted restructure has been stalled. I would expect that creditors would want to know that the Bill Express hole is not getting deeper by the month before they agree to new financing arrangements. Creditors would be well advised to talk direct to newsagents.

When I signed for Bill Express I did so on the basis that the Advertising Rebate of $210 was guaranteed. The company stopped paying this guaranteed rebate in February without reason. At the same time it advised it would withhold around 30% of my bill payment commission to advertise the service. No advertising has been done. I want the 30% back so I can put it to better use in my business.

In the meantime, I am contributing to a group legal action against the company.

The Queensland Newsagents’ Federation is engaged in dialogue with the ACCC on behalf of newsagents on the Bill Express issue. This has developed as a result of the advice provided by the QNF to its members around two months ago. Many newsagents have written to the ACCC expressing their concerns about the recent removal of rebates by Bill Express and providing details of information and representations on which they relied in deciding to sign the Agreements.

The QNF has graciously offered to funnel relevant Bill Express information to the ACCC on behalf of any newsagent. If you have information you may consider relevant please make contact through:

Ann Nugent
CEO, Queensland Newsagents Federation
58-62 Pineapple Street, Zillmere Q 4034
P: 07 3862 7100 F: 07 3862 7111M: 0488 763 236
E: anugent@qnf.org.au

Alternatively, newsagents with concerns about representations made to them prior to signing agreements related to Bill Express which have subsequently been found to have been misleading could write direct to the ACCC.

The anger of newsagents about the Bill Express mess continues to grow. If what I hear, more groups are forming looking at legal action and more individual newsagents are seeking their own legal advice.

While some are focusing on the agreements newsagents signed, others are focusing on representations made which guided newsagents to sign these agreements. It is this latter focus which is interesting but more complex to consider.

Newsagents preparing to seek advice could benefit from:

1. Gathering all documentation they have about Bill Express: Agreements, brochures, magazines with articles about Bill Express, letters, file notes and records of phone calls. For example, if you relied on the information in any Express Shop Update such as Issue 3 on July 14 which stated explicitly on page 3 that the $210 a month national advertising screen rebate is a “guaranteed commitment”.
2. Recalling and recording details of Bill Express related events attended: who invited you, how, what did they say to invite you. Who spoke at the meeting and what did they say.
3. Recalling and recording details of any other information and or advice upon which you relied in making your decision to go with Bill Express.

Who said what and when in encouraging your decision top commit to Bill Express could be considered of interest by your legal adviser if the information on which you relied has subsequently turned out to be false or misleading.

Newsagents need to present all possible information to those advising them through the current Bill Express issues. Too narrow a focus could result in a missed opportunity.

A report on Page 62 of today’s Australian Financial Review suggests that the company is close to sorting its woes out. I am interested that the key quotes from Ian Christiansen, CEO of Bill Express, relate to newsagents and that the company compensates us for non performance. Hmm, Bill Express established the terms around which it acquired newsagent locations and it was through these terms that it trained newsagents on the compensation model for taking the Bill Express equipment.

The AFR article tales about possible legal action by newsagents against Bill Express. I am aware of five groups of newsagents working with lawyers and at least another fifteen working individually with lawyers. I’d expect ASIC, the ACCC, the NSW CTTT and several other statutory bodies to be looking closely at Bill Express and, in particular, how newsagents were recruited.

Mobile phone recharge is the largest volume product category sold in newsagencies through the Bill Express equipment. I’d expect that the troubles of the company over the last two months have resulted in a considerable fall in mobile recharge revenue. Many newsagents have gone elsewhere – to ePay, banks and our own eziPass – regardless of the continuing cost of their Bill Express equipment.

The elephant in the room at the ANF National Convention this week has been the Bill Express issue. Just about every newsagent I meet asks what is likely to happen and whether they will have to pay back the lease they took out on the equipment. Like so much about Bill Express at the moment not much can be discussed publicly. I can’t help but feel that the Convention would have been a good time for newsagents (and only newsagents) to get together and talk about the situation.

When Bill Express unilaterally removed the marketing and other rebates in February, they introduced a new pricing structure which included the quarantining of around 30% of my revenue from bill payment services for marketing. It is May and I am yet to see any activity for my contribution to their marketing fund. Given the apparent financial stress of the company it is a fair questions to ask what is happening to my money.

Given the out of stock problems of recent weeks and other noise swirling around Bill Express I would have thought it in their best interests to managing the marketing funds they are collecting from newsagents in a more transparent and proactive way.