Retail NI and shop owners plan legal action against Grenke
Store owners plan legal action to force Grenke to back down over loan payments
Stores stuck paying thousands of pounds in loan repayments to finance firm Grenke for services they are no longer receiving are planning legal action against the company, supported by a retailer trade body.
Ad agency Viewble Media (VM) had organised for Grenke and at least four other finance companies to provide £10,000 loans to small retailers for the purchase of store displays from the ad agencies. The stores were promised by VM that they would receive advertisement payments equal to the loan repayments.
Despite these promises being broken by VM, and experts valuing the screens as worth less than £500, stores were told they still had to pay back the loans because VM were not a party to the loans.
Retailers have claimed they were not adequately informed of the terms of the agreements. This has been denied by the finance companies, though many of the firms have allowed stores to exit these loans without significant additional costs, according to store owners. Grenke, however, refused to follow suit.
The trade body for independent stores in Northern Ireland, Retail NI, has confirmed that efforts are underway to force Grenke to abandon the loans. A spokesperson for the trade group confirmed a meeting is due to take place at the Crowne Plaza Hotel in Belfast on 12 February to discuss taking legal action against Grenke, with Retail NI looking to contribute £5,000 to the war chest.
At least 85 retailers from Northern Ireland and the rest of the UK are understood to be planning to attend the meeting and also help fund the legal challenge.
Asked previously about the legitimacy of its agreements with independent retailers in relation to the digital media screens, Grenke released a statement reading:
“Grenke operates in the B2B sector providing leasing facilities for businesses to acquire equipment for use within their business. Grenke has a relationship with many suppliers of various types of equipment, Viewable Media being one. The relationship is based on the customer choosing to acquire equipment from a supplier and, if required, Grenke being introduced to provide the financing facility. All the contracts were introduced via Vision Asset Finance, an intermediary broker.
“Grenke are not experts or dealers in the equipment that we finance, practically or contractually. For avoidance of doubt the dealer is not appointed as our agent. There is an expectation and obligation that the customer makes the choice of equipment and dealer based on the requirements for their business, and performs any appropriate due diligence.
“Grenke believes that our leasing and finance products are clear and transparent. Indeed, while we are not contractually obliged, Grenke does apply enhanced due diligence to ensure customers are fully aware of any finance contract that they are entering into. This includes customers signing an application for finance, and a leasing contract clearly outlining their contractual obligations. In addition, prior to the lease activation, a recorded customer satisfaction call would have been conducted by the supplier with the customer confirming their understanding of the contract structure, payments due and liability. Set against this background it is difficult to understand why customers believe they have been mis-sold the finance contract.
“As a responsible lender, Grenke will always try to assist customers with any issues they may have surrounding their lease contracts. In this particular instance the issues appear to relate to separate media and advertising contracts with Rhino Media Group. Where this is the case we have directed customers towards the providers of these contracts. Rhino Media are still trading, however Shoppers Network and Viewable Media are in liquidation with insolvency practitioners appointed. The insolvency practitioners advise all known creditors have been or will be paid in full. Customers who have a claim regarding unfulfilled contracts by these parties should submit a claim to the insolvency practitioners Oury Clark email@example.com Tel: 01753 551 111.”
This article doesn't have any comments yet, be the first!
Register to comment and get exclusive content and subscribe to the online and print versions of Retail News.Become a member