Legal loophole for Smartbox victims
The MA has learned there may be a way out of onerous lease agreements for hundreds of Smartbox victims.
About 750 licensees were owed hundreds of pounds and left tied into three-year finance deals when the controversial screen media company collapsed in late November.
The advice from finance companies such as Lombard, Weatherbys, ING and Haydock has been to pay lease fees, typically about £250 a month, or phone to arrange a settlement figure.
Some may have a way out under the Consumer Credit Act. In 2004 the Government introduced changes to the Act under the Consumer Credit (Disclosure of Information) Regulations 2004.
The changes meant that anyone from 31 May 2005, including sole traders and partnerships, taking out a finance agreement had to be given a pre-contract information document prior to signing a lease for it to be valid.
One Smartbox insider claimed: "The install engineers who were given lease agreements to take to the customers to sign may have been good at installing systems but were pretty useless with paperwork.
"Many pre-contract information documents were never given to the customer."
A former installation engineer told the MA: "Customers were not given pre-contract documents and 99% of customers did not see any paperwork until we arrived."
Another said: "Pre-contract information was there but sometimes we didn't leave it with the customer. I assumed it was sent to them afterwards."
Consumer Credit Trade Association regulatory policy manager Graham Haxton-Bernard said: "If the pre-contract document is not issued, the agreement is unenforceable without a Court Order.
"It is up to you whether you take the document away to digest or sign it there and then, but they must give it to you before."
"If there has been a breach, the judge would weigh up the prejudice caused to the debtor by not seeing the information against the culpability of the creditor. The burden of proof is on the creditor to prove it was given to the debtor.
"The Judge could even, under section 135, direct the creditor to pay back any money already paid."
Smartbox owners register new company
Kate Venables and Neil Orton, the father- and-daughter team behind Smartbox and Vision Leisure Services (VLS), have registered a new company, Refresh (TV) Ltd, at Companies House.
The company was created on 13 December 2006 and is registered at the same address in Sutton Coldfield as collapsed companies Smartbox and VLS, as well as Tec Rentals.
It is not yet known what service the company will be offering. On 14 December it applied to the Office of Fair Trading for a Consumer Credit Licence, which is required to lease out goods and arrange finance.
Pre-contract checklist
1 Check date you signed. It must be after 31 May 2005
2 Do you have a document entitled "Pre-Contract Information"?
3 The document will be similar to a contract but without signature boxes
start using your smartbox
One former Smartbox victim has developed a solution to make use of the equipment and earn enough money to pay off his lease for the system.
Glenn Yates, of Ye Olde Bell & Steelyard in Woodbridge, Suffolk, was distraught when he heard of the collapse of screen media company Smartbox just weeks after installing the equipment. He was left to pay finance company Weatherby's £256 a month for three years or pay a settlement figure of about £6,000.
"At first I thought it was disaster but it has now worked out better for me and I am actually happier," he said.
"I produce and sell my own advertising space, which is more relevant to the area. The Smartbox ads were totally irrelevant - tandoori restaurants in Solihull, for example."
Yates' solution cost almost nothing. He used Powerpoint viewer, free to download, to design and produce adverts.
Selling four slots has enabled him to cover the monthly costs of his lease.
"I mix in the ads with local news as well and more people now notice the screens. We also put our own pub events and promotions up. If I sell a few more slots I will even make a profit."
For a small fee, Yates has offered to help fellow Smartbox sufferers interested in creating their own content. He can be contacted via info@yeoldebell.co.uk.
