Victims say firm demanding money

…"quite a number" of other franchisees had contacted him saying they too had been facing pressure to sign the rescue package. "They tell me that they are being pressured by head office to either pay up or they would have to face debt collectors," Mr Trevidi said.

The New Zealand Herald
March 13, 2008

Victims say firm demanding money
Lincoln Tan

When Green Acres ironing franchisee Ajay Kumar Verma received a call from the company headquarters to attend a meeting two weeks ago, he thought the bosses would be giving him good news about getting some of his money back.

Instead, Mr Verma said, he was asked to sign a "rescue package" or warned that the company would commence proceedings to get back the $25,000 its financial arm, FBL Finance, had paid on his behalf to former area manager Keith Lapham.

The franchise was non-existent and Mr Verma never received any ironing equipment.

Last week, another finance company, Finance Now Ltd, also issued a final notice to about 30 Green Acres franchisees as it too sought repayments for about $150,000.

"It is just crazy and I don't know when this nightmare will end," Mr Verma said. "The company had taken one instalment out from my account for $700 to pay the loan and I immediately had to cancel that bank account so they cannot continue to take out any more."

He has written to Green Acres asking for the amount to be refunded, but said he had not had a response.

Mr Verma, from India, was one of about 200 immigrants who have been allegedly defrauded of between $21,000 and $25,000 each by Lapham, a Green Acres franchise master who sold them ironing franchises said to be "bogus" or "non-existent".

For Mr Verma, signing the rescue package was not an option because it would mean having to fork out more money, which he didn't have, to buy a vehicle and the ironing equipment.

Ketan Trevidi, spokesman for Franchise Watch, a group set up to represent the victims' interests, said "quite a number" of other franchisees had contacted him saying they too had been facing pressure to sign the rescue package.

"They tell me that they are being pressured by head office to either pay up or they would have to face debt collectors," Mr Trevidi said.

"Many are still unsure of the New Zealand system and are worried about what will happen to them and that they could lose everything they owned."

But a Green Acres spokesman said the company "absolutely refutes the claim" and that it "hasn't asked for the suspended repayments or interest on the loan and it has yet to decide on what to do [on the loans], so the claims just doesn't stack up."

He said 20 per cent of franchisees had signed up for the rescue package, with some signing for ironing business and others on non-ironing franchises.

But Mr Trevidi said many had turned down the rescue package offered by Green Acres to legitimise their franchises because it did not guarantee their incomes and required them to pay more money to buy vehicles and do their own pickup and delivery.

Meanwhile, the Franchise Association of New Zealand says it will be issuing key advice on buying franchises in several languages to help non-English-speaking residents, like those involved in this saga.

Yesterday, Serious Fraud Office chief executive Grant Liddell told the Herald that investigations into the Green Acres case were ongoing and that a decision had yet to be reached of whether any charges would be laid.

Police have also launched an investigation into another company, commercial cleaners Green Power, for allegedly selling bogus franchise businesses to Chinese immigrants.


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Risks: Fraud, Outright scam, Language shortcomings create a vulnerability, Immigrants as prey, Police dump cases because of budget constraints, Watchdog fails to bark, Wild West of the business world, Fearmongering, Fear of poverty, Bankruptcies, several, Air of desperation, Unauthorized funds transfer by bank, New Zealand, China, India, 20080313 Victims say

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