http://blogs.mirror.co.uk/investigations/2009/12/we-nail-that-rta-sales-pitch.html
DECEMBER 16, 2009
Our old mate Paul O’Reilly wasn’t pleased to hear from us.
“You will obviously be aware that I have always found your tactics distasteful and you do nothing more than emphasise this view with your latest approach,” said the boss of RTA (Business Consultants) Ltd.
His outfit claims to help people sell their businesses.
But lots of their clients tell us that RTA over-values businesses, takes an upfront fee, then fails to find a buyer – not surprisingly if the business was over-priced.
Then it demands a hefty penalty payment when the owner wants to escape from the contract.
Victims told us they were verbally assured that they’d be no withdrawal penalty, only to be sued by Stockport-based RTA if they don’t pay one.
We put this to the test, going undercover to record a RTA sales pitch – presumably this is what O’Reilly calls our distasteful tactics.
Before hearing what rep Andy Dearing said, you need to know that the contract he brandished stated that RTA had selling rights for “an irrevocable 12 month period” and that if you wanted to get out of the contract before then you’d have to pay the commission that RTA would have got had they sold the business.
What Andy Dearing said was very different.
Penman, posing as a friend of a businessman who wanted to sell his Post Office, asked: “What’s the deal on pulling out if there’s no sale?”
Dearing: “With other companies you’ll have a withdrawal fee. With us you don’t have that at all.” Penman: “If there are no takers, it’s all right to take it off the market with you and go with someone else, there’s no penalty for that?” Dearing could not have been more clear: “No, no, no.” Me: “So the owner could put it on the market with someone else and you don’t chase for your commission?” Dearing: “Yes.” Me: “So you can cancel in that 12 months without penalty?” Dearing: “Yes, yes, yes.”
That’s not the experience of Bashar Kadah who put his furniture shop on the market with RTA. Just one hour after signing the contract and talking it through with his wife he rang to cancel.
RTA refused and said it would sue him for its full commission – £20,000. In the event it successfully sued for £5,000.
“I’m refusing to pay because they did nothing useful,” he told us.
“They valued my shop at about £500,000 when it’s worth nearer £300,000 and so I haven’t had any offers, not even any viewings.”
We forwarded the sales pitch given by Andy Dearing to RTA director O’Reilly, who insisted that as their terms were “wholly negotiable” then what the sales rep said was accurate. “He offered a contract that had no withdrawal fee to pay nor did it have any penalty for an early withdrawal despite it technically being for an irrevocable 12 monthly period.”
The crucial word here is “technically”. If you sign a contract with RTA then you are “technically” bound by that contract, not by whatever the sales rep says.
That means they can sue you if you try to get out of it on the perfectly reasonable grounds that they haven’t found any buyers.
And they do sue. Just ask Bashar Kadah.
