A four-year battle for hundreds of stores scammed by digital-media-screen companies has ended in defeat for small-shop owners, following a ruling by the Financial Ombudsman Service (FOS).
Viewble Media and Rhino Media Group arranged third-party leasing for advertising screens, which they promised would be covered by payments for ads displayed on the devices. Both companies went bust, leaving stores with debts of £10,000 per screen to the finance companies, the most common of which was Grenke.
Ever since, stores have been battling to get out of paying the finance firms, claiming they were missold the agreements. Dozens of county court claims against the stores from Grenke have been making their way through the courts, with many losses for the victims of the digital screen scam.
A ‘test’ case was funded by those retailers affected, but a final FOS decision published in February found there was ‘no basis’ for ruling against Grenke. Group organiser, Mace Aghalee store owner and fellow scam victim Alan Collingwood told those affected there was “now very little chance of a successful defence through the courts”.
Speaking to Better Retailing, Collingwood said: “The regulators said they have sympathy for us, but the law is the law. Frankly, there is a gap between what’s covered by the Financial Conduct Authority and FOS, and it leaves small businesses with little protection.
“I have no doubt this scam will happen again, because [the digital screen companies] got away with it.”