Dick Smith entered into voluntary administration on 5th January. This was obviously not acceptable to their bankers, NAB and HSBC, for almost immediately they, in their capacity of secured lenders, appointed Receivers, who take precedence over voluntary administrators.
One of the first acts of the Receivers, Ferrier Hodgson, was to announce that outstanding gift cards would not be honoured and that any customer deposits would not be refunded.
Naturally, this brought howls of outrage from disgusted customers and, understandably, Dick Smith’s social media pages were flooded with complaints. Since then it has become the accepted wisdom that the blame for so many customers losing their money in this way rests fairly and squarely with Dick Smith.
But a different set of culprits might emerge if we delve a little deeper. We know that it was the Receivers who announced that gift cards and deposits would not be honoured or returned. But who appointed the Receivers? Why none other than the two major banks, in exercise of their almost limitless powers as SECURED lenders.
Who do the Receivers answer to? Only to the banks who appointed them. And what is the Receivers’ primary duty? None other than to extract from the company enough to repay the secured lenders whatever they say is owed to them.
It was therefore a conscious decision on behalf of the banks, who never fail to make a colossal profit every Quarter, to put their own financial interests before those of ordinary people who innocently trusted small sums to a deeply flawed financial system that favours the big and powerful.
And where is the much-vaunted Australian Consumer Law when it comes to protecting shoppers who lose out in cases like this? The answer is nowhere. It might just as well be so much ‘window-dressing’. ASIC, ACCC, Fair Trading and all the others in the consumer-protection industry will, of course, huff and puff but, as usual, will do little or nothing to protect ordinary people against predatory big-business and banks. And what about the lack of political will? It would be the simplest thing in the world to enact legislation that provided that deposits (covering gift-vouchers, lay-bys, etc.) up to a certain reasonable upper limit made by non-commercial persons are deemed to be held on trust, thus keeping them out of the greedy clutches of secured lenders.
Meanwhile, we shouldn’t let the banks off the hook. If they had an ounce of moral scruples they would never have allowed their Receivers to have stated on their behalf that they would not honour outstanding gift vouchers or refund deposits paid for goods. So, next time you hear on television the usual public-relations propaganda about how generous the banks are to all sorts of sporting clubs and events, just remember what they’re really like when their mask of respectability slips. And why not let them know what you think of them!