Aussies hit with $30K bills as ad firm goes bust
Thousands of Australian small business owners lured into so-called free advertising deals are now facing bills of up to $30,000, after the company went bust.
The businesses - including shoe shops, hair salons and fast food outlets - signed up to Rebl Corp's social media advertising and Customer Relationship Management software (CRM) packages on the promise they would receive "cost neutral" promotion for their outlets.
The advertising was delivered, giving the businesses exposure, but its subsidiaries, Digital Rebl and Media Rebl which handled the contracts, have since collapsed, meaning the small businesses are now liable for payments to third-party finance companies.
Queensland's Letitia Hutchings, 28, may be forced to pay almost $30,000 back to a finance company, leaving the future of her Toowoomba-based hair salon, Wow! Excellence in Hair in doubt.
"It could potentially close my business, I'm a small business," she said.
"I only opened this salon at the end of 2017."
For every new customer it signed, like Mrs Hutchings, Rebl Corp was given in excess of $10,000 from one of the five different finance companies it was dealing with.
But in the process, the customers - some claim unknowingly - were signed to lengthy contracts for the CRM software that was bundled with the advertising deal.
Rebl Corp told its customers it would pay them an amount equal to the finance company repayments each month making the advertising deal "free", but was absolved from keeping up the payments once it collapsed.
Mrs Hutchings said when she questioned how the company made money offering a free service, a Rebl Corp saleswoman told her it was "only for selected businesses".
"(I) did as much digging as I thought necessary to make sure what I was getting into was legit," Mrs Hutchings said.
The contracts are now under investigation by the Australian Financial Complaints Authority (AFCA) which will determine if they're able to be enforced.
Grenke, the finance company Mrs Hutchings was contracted to, is not a member of AFCA so any decision it makes won't apply to her.
In late November, she received a letter from lawyers acting for Grenke stating she owed almost $30,000, not including GST, but could receive a 40 per cent discount if she paid within 12 months.
Rebl Corp director Michael Maunder was previously the director of in-store advertising company Viewble Media which employed a similar contract technique and left 4500 Australian customers in limbo when it too collapsed in January.
His former co-director Jason Madden was sprung living the high life in the Philippines with his new wife earlier this year.
A Melbourne-based Grenke spokesman, who asked not to be named, told News Corp they only provided finance for Rebl Corp for "six to eight weeks" to a "couple of dozen" customers.
He said Grenke provided finance for Rebl Corp's CRM software packages and it wasn't aware of the "bundle" with online advertising or rebates offered to customers.
The spokesman said despite the letters, Grenke was not "enforcing" the debts owed and had not passed them on to debt collectors.
"It's really our way offering to say obviously something went wrong so let's solve this dispute together," he said.
"Both parties win and we'll make a loss, the customer also has to bear his part but that's dispute resolution.
"What's just important to understand is funders don't really have an advantage in this case. We're the ones carrying the loss."
AFCA were unable to provide comment as its investigation is ongoing.