This month we continue to develop new products and features, the new segment in our newsletter is one such example. You can now access the latest news from the Bank Doctor. Like everything else we do, hopefully these articles will be of value.
The attachments this month include Dealing with Debtors from creditor(watch), Involved With Disptues from the Small Business Ombudsman, Investigator Upgrade and What Does a Criminal Look Like by Credit Matters
If you are interested in advertising with Credit Matters, please contact Kim and see what he can do for you. You will be surprised at the very reasonablly priced packages which can be arranged to promote your business.
“Let us be thankful for the fools. But for them the rest of us could not succeed.”
In many of my blogs I talk about dealing with slow paying customers, getting payments from fraudsters, doing profitable business and the “art of business.” Using this month’s quote from Mark Twain, offers another opportunity to explore these themes.
The main issue when taking advantage of other people’s incompetence is to do so legally and with smart business, plus knowing the difference between truly smart business practices and those that are fraudulent and unethical.
Following are a few indicators which allow smarter business people to take advantage over the less competent business people who fail to understand the world of business. More importantly, whilst we all make mistakes in business, the less competent generally fail to learn from their mistakes and to change their business practices accordingly.
Nothing benefits customers more than a supplier which does not manage their cash or outstanding invoices. Regretfully we still see today, many business owners and managers do not understand the dynamics of selling on credit, the changing attitudes of debtors towards paying their debts and what is happening around them in the global community.
From another perspective, many customers do not appear to be aware of the issues facing their business if they do not pay their accounts in a timely fashion. Alternatively, there are other business people who understand the “art of business” and still obtain favourable deals despite being slow payers.
We also see business managers create impenetrable walls of technology whereby their customers and suppliers are unable to communicate effectively with their business. Little do these managers realise, they are not managing their business liabilities, and I do mean the liabilities listed in the balance sheet.
It goes without saying, we are also operating in turbulent times. For instance, creditors are losing their rights, customers are willingly to commit fraud, and disgruntled employees and customers willing publicly shame others. Meanwhile, many business people and their managers continue to operate in the belief they are somehow immune from the effects of these times.
The reality in business is once you understand the signs of incompetence in others, you can take steps to protect and grow your business. The secret for your own business success is knowing how to do so legally and with smart business strategies and the difference between truly smart business practices and those that are fraudulent or unethical.
Is your business model still valid?
The problem with business models is that many are built based on today’s theory and resources. In start-up mode, a properly constructed and thought out business model is essential as this provides the base from which you will build your business.
In a fast moving and turbulent world however, one the most dangerous factors in operating a business, is your business model. Too often, management becomes attached to their business model, even if it is not working.
To adapt your business model as things don’t quite work out, is common sense. However, it can also be perceived as a failure of the originating model.
The only business model which works is where there is an ethos for long-term survival, allows you to sell profitably, as often as possible, and you are paid within terms. All other business models are based on yesterday’s theory.
Your conundrum therefore, is to create a business model which guides your business and yet is adaptable for a profitable and long-term future.
Just because you need to be paid to pay your bills, why do you think your customer cares or will pay you?
It is simply amazing how many business people, still think their customers will suddenly care about paying their outstanding debts, when the supplier has been blasé about outstanding account matters in the past.
Suppliers are often slow to chase up unpaid invoices, respect their customer needs or to quickly resolve problems in order to work together more efficiently. When these issues are part of a trading relationship, suppliers shouldn’t be surprised when their customers don’t rush to pay them because they suddenly need the money.
The best way to maintain prompt payments from customers is to regularly contact them about unpaid invoices, to work through problems as soon as they are identified and make all efforts to have a seamless trading relationship.
Is the spelling veranda or verandah?
One of the well known uses of the word verandah is in the song Home Among the Gumtrees, written by Bob Brown and Wally Johnson in 1974 and later recorded by John Williamson. The spelling used was verandah. Today if a person used Microsoft’s Word to write the lyrics, they’d most likely use the spelling veranda, as verandah is not included in the Microsoft spelling dictionary.
According to both the Macquarie and Oxford dictionaries the primary spelling is verandah, with veranda listed as a secondary spelling. For Australian sites (those ending in .au), according to Google the usage of verandah to veranda is approximately 2:1.
So next time when you’re sitting in an old rocking chair pondering, you’ll know the primary spelling in Australia is verandah ending in an h.
22 May 2018
Safe Harbour and staying the implosion of contracts after engaging in a formal insolvency process
Keeping sinking ships afloat
Directors and holding companies perspective
14 June 2018
In December 2016, the Court of Appeal of the Supreme Court of Victoria summarily dismissed what was an unprecedented defamation action brought by Milorad Trkulja against Google Inc.
But, in a much anticipated decision,1 the High Court of Australia on Wednesday unanimously allowed Mr Trkulja’s appeal against the Court of Appeal’s decision, permitting Mr Trkulja to continue to prosecute his case against the search engine.
By Ben Coogan and Georgia Campbell
20 April 2018
This week Thomson Geer hosted, and I chaired, a critical franchising update seminar on the topic “preparing for the burden of ‘vulnerable workers’ legislation: proposed solutions for your business“.
It is quite a topical issue due to the numerous official reports into the “7 Eleven scandal” and the introduction of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Cth). Although it is only at Bill stage and not yet enshrined in legislation, we expect that it will pass through the Senate without too much resistance or amendment. The next step is that the Senate Report is due on 9 May 2017 which is not far away.
By Ben Coogan
How to Give Effective Feedback.
Providing both positive feedback and constrictive criticism is all a part of the business world. It is a great skill for leaders to possess as it can lead to higher levels of productivity as well as overall loyalty. Here are 5 tips to take away and possibly apply to your next feedback conversation.
Most leaders assume that proving feedback to their employees will constitute immediate change. This is not always the case and should, in fact, be considered a gift. At the end of the day, no matter how sincerely feedback is delivered, how relevant or specific, it is up to the receiver to interpret it and choose what to do with it.
Remember to be clear and concise when giving feedback. The effectiveness of it reduces when one assumes that their peers need to hear specific feedback. Before you give feed back, it is wise to ask the following questions to determine the interests of the reciever:
- Why do I need to give this feedback?
- Is it my role to provide this feedback?
- Do I desire a behaviour change or do I believe the receiver can perform better?
Be descriptive as possible to as to not avoid any misconceptions. It is important to ensure your feedback is “observational” based feedback rather than “judgemental”.
We’re here to help! Contact Trace Personnel on 9218 5466 for all your recruiting needs!
Updates courtesy of www.asic.gov.au
23 May 2018
The Federal Court has dismissed an appeal from a decision of the Administrative Appeals Tribunal, affirming ASIC's decision to disqualify Mr Lubo Zivanovic, of Bilgola Beach, NSW, from managing corporations for three years.
ASIC disqualified Mr Zivanovic on 18 February 2016, following his involvement in the management of numerous failed companies, namely:
- Oneover Pty Ltd (ACN 105 854 475);
- Bargara Rentals Pty Limited (ACN 123 819 876);
- Bargara Services Pty Limited (ACN 106 082 268);
- Backvet Pty Ltd (ACN 104 664 422);
- Markaway (NSW) Pty Ltd (ACN 070 008 507);
- Toandtwo Pty Ltd (ACN 118 706 291);
- Girraween Scaffold (Australia) Pty Ltd (ACN 129 942 132);
- Mountrich Pty Ltd (ACN 129 457 834);
- Devlaw Pty Ltd (ACN 073 291 960);
- Muneemake Pty Ltd (ACN 105 501 102);
- Tinaduke Pty Ltd (ACN 127 655 805);
- Cebakay Pty Ltd (ACN 105 855 749);
- Invotow Pty Ltd (ACN 105 008 044);
- Kakconab Pty Ltd (ACN 135 880 625);
- Ezocom Pty Ltd (ACN 127 199 713);
- Fratocom Pty Ltd (ACN 090 682 752);
- Notxituk Pty Ltd (ACN 068 575 922); and
- Twooftwo Pty Ltd (ACN 096 737 450).
All the companies managed by Mr Zivanovic operated in the building and construction industries and were wound up in liquidation between 2008 and 2014. Liquidators lodged reports for all 18 companies, alleging each company was insolvent and had failed to keep books and records. The total estimated deficiency by the liquidators was $26,855,268.
The liquidators of Noxituk Pty Ltd and Ezocom Pty Ltd also lodged supplementary reports with ASIC that alleged these companies failed due to Mr Zivanovic’s poor management and control, extremely large debts that were accrued, their failure to pay tax and lack of company records.
Mr Zivanovic appealed ASIC’s disqualification decision to the AAT and obtained suppression orders that prevented ASIC from disclosing his disqualification. On 8 August 2017, the AAT affirmed ASIC's decision. Mr Zivanovic then appealed the AAT's decision. On 17 May 2018, the Federal Court dismissed Mr Zivanovic's appeal. Mr Zivanovic is now disqualified from managing corporations until 18 February 2019.
24 May 2018
An ASIC surveillance found that Cash Converters Personal Finance Pty Ltd ('Cash Converters') had systematically failed to meet regulatory guidelines on debt collection practices, including by too frequently contacting consumers.
ASIC found that as a result of poor internal controls and policies Cash Converters routinely breached Regulatory Guide Debt collection guideline: for collectors and creditors (RG 96), which recommends that consumers be contacted regarding a debt not more than three times per week or 10 times per month. These guidelines are based on legislative prohibitions on harassment and coercion.
Cash Converters also provided incorrect information to consumer credit reporting agency Equifax. This may have resulted in up to 38,500 customers being reported with inaccurate amounts owing over a one-month period.
28 May 2018
ASIC has cancelled the registration of Victorian auditor, Philip James Dowsley, as a registered company auditor.
Mr Dowsley requested the cancellation during the course of proceedings brought by ASIC before the Companies Auditors Disciplinary Board (CADB). The cancellation took effect on 31 March 2018.
ASIC took the CADB action because Mr Dowsley had failed to comply with undertakings he gave to the former Companies Auditors and Liquidators Disciplinary Board (CALDB) in October 2015, and due to the adverse outcomes of an independent peer review of Mr Dowsley’s first four audits following his completion of a suspension ordered by the CALDB.
04 June 2018
ASIC has extended two ASIC instruments to allow additional time to consider the policy position in relation to certain disclosure obligations of managed investment schemes and superannuation trustees.
The relevant instruments are: [CO 12/749] Relief from the Shorter PDS regime and ASIC Superannuation (RSE Websites) Instrument 2017/570. Each instrument had been due to expire on 30 June 2018.
These extensions will maintain the status quo in the meantime, enabling ASIC to adjust or revoke the relief once the policy position is settled by Government.
The expiry dates specified in the instruments align with the usual 10-year sunsetting period for legislative instruments under the Legislation Act 2003. No assumption should be made that the instruments will continue in force for that length of time.
13 June 2018
ASIC enforcement action has resulted in four infringement notices totalling $50,400 to Bananacoast Community Credit Union Pty Ltd (BCU) for potentially misleading statements in several online advertisements, as well as remediation to affected consumers.
The advertisements, which ran in 2017, offered a special interest rate for home loans and personal loans but did not clearly or prominently disclose that the consumer was required to pay for consumer credit insurance (CCI) for five years to receive the advertised lower interest rate. Some advertisements included a fine-print disclaimer while others did not display any further information.
The advertisements that did carry a disclaimer did not give suffient prominence to important conditions and did not adequately explain how some of the conditions operated.
ASIC considered that the ‘click through’ facility used on some websites, which provided additional information on other webpages, was not adequate to correct the misleading overall impression.
ASIC Deputy Chair Peter Kell said, 'A promotional offer with conditions attached must not bury the conditions in fine print or elsewhere, particularly when the promotion involves a potentially poor value product such as CCI’.
12 June 2018
Dover has advised ASIC it will cease providing financial services.
As such, Dover clients might look for a new adviser. If you do that you should make sure you are dealing with an adviser authorised by an Australian financial services (AFS) licensee.
If you want to get financial advice and want to continue to use your ex-Dover adviser, you need to make sure they have been authorised by another AFS licensee. If they have not been authorised or if for other reasons you want to change to a new adviser, you need to make sure that new adviser is authorised by an Australian financial services licensee.
ASIC's MoneySmart website has guidance on how to choose an adviser.
theBankDoctor offers free banking and finance advice to help small business owners get the best business banking set-up.
18 June 2018
The aborted Prospa IPO raises questions not just about the online SME lender’s compliance with UCT but also ASIC’s role in applying and enforcing this law which came into effect in November 2016.
By Neil Slonim
04 June 2018
An agreement has been reached today between AUSTRAC and the Commonwealth Bank of Australia (CBA) for a $700 million penalty to resolve Federal Court proceedings relating to serious breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The parties will jointly approach the Federal Court seeking orders to this effect. It is anticipated that a hearing on penalty will be scheduled in the coming months.
If agreed by the Federal Court this will represent the largest ever civil penalty in Australian corporate history.
23 May 2018
AUSTRAC has published a consultation paper and draft Ministerial Determination for the 2018–19 industry contribution.
AUSTRAC invites stakeholder feedback on the consultation paper. Deadline for submissions is Friday 22 June 2018.
01 June 2018
Victoria's anti-corruption Commission, IBAC, has charged a 51 year old former Corrections Victoria employee from Loddon Prison with four counts of bribery and one count of misconduct in public office.
The charges are the result of an investigation by IBAC following a notification from Corrections Victoria.
Court proceedings are scheduled to commence at the Bendigo Magistrates' Court on 9 July 2018.
IBAC can make no further comment as the matter is now before the Court.
To report public sector corruption or police misconduct now visit www.ibac.vic.gov.au or call 1300 735 135.
31 May 2018
The ACCC is currently prioritising anti-competitive conduct in commercial construction markets and has established a Commercial Construction Unit (CCU) focussed on the construction sector.
The CCU is a specialist team that has been set up to investigate allegations of anti-competitive conduct in the commercial construction sector. The focus is on the behaviour of participants in the construction industry that may raise competition concerns under the Competition and Consumer Act 2010 (CCA).
08 June 2018
This guide sets out principles for businesses, regulators and associations to consider when determining whether country of origin food labels are being displayed in accordance with the Country of Origin Food Labelling Information Standard 2016. It is intended to supplement the information in the ACCC’s Country of origin food labelling guide.
Please note this document does not constitute legal advice. The ACCC always recommends that businesses seek independent legal advice when deciding which labels to use for their products.
30 May 2018
Wilson Security Pty Ltd (Wilson Security) will refund 320 Western Australian customers a total of $740,000, after charging for security patrols that were not provided in breach of Australian Consumer Law.
Wilson Security was contracted to provide internal premise security patrols. However in many cases, when replacing scheduled internal security patrols that had been missed, Wilson Security conducted external perimeter security patrols that are generally cheaper and less time consuming.
Approximately 48,000 missed internal premise security patrols were charged to customers between July 2011 and September 2017 in Western Australia.
01 June 2018
The ACCC has accepted a court enforceable undertaking from Fitbit (Australia) Pty Limited (Fitbit) to amend information they provide to customers about their consumer guarantee rights under the Australian Consumer Law (ACL).
From November 2016 to March 2017, Fitbit told customers that its warranty against faulty products was only available for one year. Fitbit also represented that faulty products would be only replaced for the remainder of the calendar year or 30 days, whichever was longer.
In fact, retailers must provide a remedy for faulty goods to comply with their ACL consumer guarantee obligations. The ACCC received over 100 complaints about Fitbit’s representations.
06 June 2018
The ACCC has accepted a court enforceable undertaking from home builder Wisdom Properties Group Pty Ltd (Wisdom) to remove contract terms contained in its standard home building agreements which are unfair under the Australian Consumer Law.
From October 2008, Wisdom’s Home Building Agreement contained non-disparagement clauses that allowed it to control or prevent any public statements such as online reviews, made by customers about its services.
“Consumers are increasingly relying on online reviews when making purchase decisions and businesses must not prevent consumers from seeing genuine, relevant and lawful reviews by their customers through standardised contract terms,” ACCC Commissioner Sarah Court said.
“Any standard form contract terms that prevent or limit a customer from making public comments about goods or services are likely to be unfair under the Australian Consumer Law.”
Wisdom’s Home Building Agreement also allowed Wisdom to suspend a customer’s home construction and held customers liable for any losses resulting from public statements.
Wisdom relied on these unfair contract terms to stop reviews from being published on online review website, ProductReview.com.au.
Over 3000 Wisdom customers had the non-disparagement clauses included in their Agreements. Wisdom has admitted that these were unfair and will not enforce the clauses in existing Agreements. Wisdom will not include similar clauses in future.
“This outcome should serve as a warning to other businesses that imposing contract terms that prevent their customers from making public comments will attract ACCC attention,” Ms Court said.
As part of the undertaking, Wisdom will also publish a corrective notice on its website, contact affected customers, and establish an Australian Consumer Law compliance program.
The undertaking is available at Wisdom Properties Group Pty Ltd
Further information on unfair contract terms is available at: Unfair contract terms
15 June 2018
The Federal Court has ordered that Domain Corp Pty Ltd and Domain Name Agency Pty Ltd (also trading as Domain Name Register) pay combined penalties of $1.95 million for breaching the Australian Consumer Law.
From November 2015 to at least April 2017, the two Domain Companies sent out approximately 300,000 unsolicited notices to businesses, which looked like a renewal invoice for the business’s existing domain name. Instead, these notices were for the registration of a new domain name at a cost ranging from $249 to $275.
The Court declared that the Domain Companies made false and misleading representations and engaged in misleading and deceptive conduct in sending these notices. Australian businesses and organisations paid approximately $2.3 million to the Domain Companies as a result of receiving the notices.
“The Domain Companies misled businesses into thinking they were renewing payment for the business' existing domain name, when in fact the business was paying for a new domain name,” ACCC Acting Chair Delia Rickard said.
Any business or consumer receiving a renewal notice for a ‘.com’ or '.net.au’ domain name should check that the notice is to renew their proper domain name.
18 June 2018
The ACCC’s Scamwatch service is warning the Chinese community in Australia to be wary about two frightening scams targeting them that involve threats of arrest, and extortion via fake kidnappings.
In 2018, Scamwatch has received nearly 1700 reports about these scams, with losses totalling $1.15 million. Losses have come from NSW, Victoria, Queensland or Western Australia; however the scam is targeting people nationwide.
“These scams are particularly nasty and worryingly we’re seeing a dramatic spike in the Chinese community being targeted. In May, there was a 400 per cent increase in reports of these scams and losses more than doubled,” ACCC Acting Chair Delia Rickard said.
Credit Matters is a financial risk management resource centre for the Australian business community. If you are in business, Credit Matters is your ideal source of financial risk management solutions.
Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australia business community.
Futhermore, we invite marketing and knowledge ideas from our readers and contributors on how we can assist our respective firms grow. If you have any ideas, please contact me at firstname.lastname@example.org.
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