The Australian Competition and Consumer Commission asked Macquarie Bank, Capital Finance and Cisco Systems to hold off on enforcing equipment rental agreements - sold underhandedly, it seems - by originators working for the three financiers.
The three finance companies rebuffed the ACCC's overtures, the ABC reported yesterday.
The ABC named the three financiers in a report on its
website at lunch time. The broadcaster then followed up with a
Four Corners report that centred on the involvement of Macquarie Equipment Rentals Pty Ltd.
As Four Corners reported the affair, sales representatives working indirectly for Macquarie claimed prospective customers would receive nominated equipment finance for "free".
In all cases, businesses appear to have signed two contracts: one for telecommunication services from a reseller and a second agreement to pay the rental on the equipment. However, sales reps appear to have led customers to believe the telco would cover the cost of all equipment.
The intermediaries then lodged the rental agreement with the financier, with the purchase prices of the equipment often being three or four times the market value of the items. In some cases the rental agreements were changed to include equipment that was not part of the arrangement.
The financiers paid a lump sum to the telco reseller. In many cases, these firms went out of business, leaving their customers to seek a new telco provider and also with the responsibility to pay monthly rental fees, often for terms over five years.
Affected businesses face aggregate bills from these dealings ranging from $30,000 to $120,000, based on the examples used by Four Corners.
The ACCC said there were hundreds if not thousands of instances of these contested contracts.
ACCC chair Graeme Samuel told the ABC Four Corners program that he personally asked Macquarie chief executive Nicholas Moore to "be reasonable" in dealing with the small business customers, many of whom appear to be victims of misleading and deceptive conduct and, in some cases, even fraud.
Samuel said he hit a "brick wall".
"I have to say to you this is a source of great disappointment to us," he said.
"I'd like to think that when the chairman of the ACCC approaches the CEO of a major organisation like this and says, based on my own commercial experience and based on what we believe at the ACCC is a fair and reasonable way forward, that they'd listen to it and react receptively.
"I have to say we're not encouraged by their reaction at this point in time."
The earlier article, on the ABC's website, said that Samuel approached, at CEO level, Capital Finance (a subsidiary of Lloyds Bank Group) and Cisco Systems, as well as Macquarie, and asked them to hold off on legal action.
Macquarie did agree to an interview with Four Corners.
In a statement provided to News Limited, Macquarie said it "fully co-operated with the ACCC and responded to all its requests."
Macquarie said the total outstanding value of equipment in dispute was approximately $1 million, with the average claim of approximately $19,000.