Consumer rights: 'Can I take action against agency for failing to find my soulmate?'
Request for refund falls on deaf ears and a new business franchise proves to be more expensive than promised
Sunday 31 July 2011
Q. I spent a lot of money joining a dating agency. Unfortunately all of the people I've met have been unsuitable despite assurances that they are carefully matched.
I feel that no effort at all has been made to make sure I'd get on with the people I meet. I haven't been given the service I've paid for. I've complained but been refused any of my money back and just been offered another few "free" introductions. I feel I've been naive but I'm also angry at being ripped off. Do I have any comeback or will I simply have to swallow my pride?
A. In any case where you feel you haven't been given the service you paid for and you've been refused your money back, or compensation, you can sue. You haven't told me how much you spent but I expect you could have the case heard under the small claims process in the county court which deals with claims for up to £5,000. The fees are low and you can conduct your own case without a solicitor.
However, be realistic. To win you have to prove that you haven't had the service you paid for and that won't be easy. Who is or isn't the right person for someone to get on with is a very subjective opinion. You may say no effort was made to "match" you up. The agency will robustly defend itself by arguing that it made every effort to look for people with similar profiles and that it took every possible step to make sure that the information any would-be "dates" gave them was true. Who will the judge believe? I've said you can take a case without a solicitor, but because it's so difficult to prove you're right you may need a solicitor's help and that means spending more money.
Even if you win your case and are awarded some or all of your money back, you need to be sure that the firm you're claiming from could pay you. Sometimes there's no money so even if you win your case you end up throwing good money after bad. Take advice from a solicitor. Ultimately you may be better to move on rather than risk losing more money.
Q. I decided to set up my own business earlier this year, and after a lot of research opted for a franchise. Having gone through all the figures and terms and conditions I thought I'd found the perfect fit.
I was told it would cost about £60,000 to get the business up and running. The projected income would give me a living wage, cover costs and allow me to recoup those start-up costs over a reasonable length of time.
However, nothing has gone as predicted by the franchisor. The start-up costs have stretched to about £165,000 and the projected returns are about two and a half time less than predicted.
I do have some clients but I've told the company I want to stop trading. They've said if I do they'll sue me for loss of income. I didn't take any financial advice before I started but I did check with people running franchises in areas close to mine and they told me they were doing well. I don't know what to do next.
FT, south London
A. I've taken the name of the company out of your letter because the checks I've done all point to this being a reputable company; there haven't been any other complaints like yours and this is very unlikely to be a scam. I also know that your local MP is trying to help you come to a settlement and I don't want to do anything to endanger that.
Graham Hebblethwaite, from the Trading Standards Institute, tells me: "We have had franchise problems where business opportunities or training have been oversold causing complaints about upfront fees, particularly training to be a pub licensee or driving instructor. In those cases the main business venture was to sell training with no care about whether there were any realistic business opportunities.
"This does not appear to be one of those, with a seemingly limited number of franchises available and no real complaints other than this one."
Your research with other franchisees close to your "patch" suggests there is a viable business model here. You have clients so you have created some business. However, there is obviously a mismatch between your expectations of service support, costs, income and the real figures.
Mr Hebblethwaite says: "You have to double check everything and not just rely on a franchisor's information. Independent research on both the financial and market analysis sides with local chambers of commerce, local authority economic development units and Business Link is always useful."
The firm did recommend you take independent financial advice and an adviser is likely to have pointed out the pitfalls which the franchisor, and other franchisees who are doing well, didn't. Other possibilities are that this is a business that does better in some areas than others, or that nearby franchises have already soaked up most of the available clients. Just because something has achieved good results in the past doesn't guarantee that it will in the future.
You need to see an accountant who specialises in small businesses and franchises in particular. You may need a business lawyer to look over your contract. The British Franchise Association at thebfa.org runs a mediation and arbitration scheme. It may be able to help if the franchisor is a member. It doesn't have the power or the right to intervene in a dispute but it may help to get you communicating again.
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