Ann: Profit Guidance, page-37

The article at http://stocksnews.com.au/2018/11/22/finance-companies-taking-31-million-in-alleged-viewble-small-business-tv-scam/ gives one the gist of what has happened, although it seems to be polluted by poor writing style and misplaced innuendo. In that link ,the word “administrators” is used to mean Jason Madden and David Reid, not the two liquidators now charged with winding up the show.

Jason Madden and David Reid ran two linked businesses, Viewble Media Pty Ltd and The Shoppers Network – both no longer trading. They sold audio-visual systems to businesses with a reputed promise of a rebate if certain revenue were gained from advertisers, but no rebates, or no meaningful ones, were received – see https://www.afca.org.au/news/current-matters/information-for-small-businesses-impacted-by-viewble-media-and-the-shoppers-network/. Thorn Equipment Finance is not mentioned in that link, but that may simply be that The Australian Financial Complaints Authority (AFCA) wants to run with a manageable sample of complaints, then it may propose a generic solution to all their members involved in this fiasco.

Individual complaints went first to AFCA, and it informed ASIC, as it is required to do if an issue is reasonably widespread. ASIC's current advice to aggrieved businesses is to first talk to the relevant Credit Provider, and if the matter is not resolved, businesses should approach AFCA.

This is not, I think, a matter of charging Credit Providers like FXL and TGA with illegal behaviour – rather, it is a matter for which a pragmatic compromise solution is being sought, and one that would cost some Credit Providers big money. In the following recent “guidance” Announcement from FXL, the “intermediary” mentioned is probably AFCA, or someone appointed by AFCA:

FlexiGroup’s AU Commercial Leasing business, along with a number of other finance providers, has become aware that one of its equipment finance vendor program partners has entered into voluntary liquidation, with liquidators appointed. FlexiGroup believes its contractual arrangements with the underlying small business borrowers are sound and enforceable, and has been endeavouring to identify if there is a course of action which could be taken to assist in meeting the offer made to those customers by the intermediary. This has proven difficult, and FlexiGroup has therefore taken the decision to provision for $12M after tax in relation to the Group’s exposure generated through this equipment finance vendor program partner.

On legalities, at some future time Due Diligence, for consumer and small business credit could be extended to include prescribed steps by Credit Providers to ensure promises made by originators have a high likelihood of been delivered. Legislation already requires Due Diligence to apply to such borrowers' ability to pay, and the suitability of the contract, so covering the suitability of originators is not a huge step, especially for repeat business from the same originator. The first link provided suggests that Louis Trent, director at Northern Managed Finance, easily established that Viewible was a suspect originator, and his firm withdrew its support for Viewible's business.

Interestingly, Google finds information to the effect that Jason Paul Madden and David Reid have also registered businesses in the UK, and that Jason, is an Australian citizen who is, or was, domiciled in the Philippines.