1 Jul 2015

Comcom may be powerless over grant firm

6:52 am on 1 July 2015

The Commerce Commission says it may not be able to do much about a company that more than 100 businesses have complained about, because it appears to be based overseas.

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Photo: 123RF

The Commission has been investigating the New Zealand Small Business Assistance Centre since October 2014.

Complainants say the company told them they were eligible for government funding, but after paying to access a grant provider database, they found they were not due any money.

The commission's consumer manager, Stuart Wallace, said the company may be based in Canada, and it was tricky to tackle offshore companies.

"It is difficult when a company is based offshore, if that's what is the situation here. We might be able to look at the internet service provider that is involved here, financial institutions etc. We'll need to take a good look - there might be an order to stop businesses losing money here."

Mr Wallace said the commission was working with authorities in Canada, Australia and the UK, as part of the investigation. All the countries have almost identical websites tailored to their markets.

But any action may have to be through intermediaries, for example businesses approaching their bank.

In another twist, companies with videos on the site, which are labelled as success stories, say they had no idea the footage was going to be used commercially.

There are 10 "success stories" on the website. Companies talk about big grants they've been given - up to $2.4m - and some, such as Pacific Edge and Vista Entertainment are well known.

Radio New Zealand has spoken to most of the CEOs who appear in the videos, and none of them realised they were going to appear on the commercial website.

They said they were asked to appear in a video about why people should apply for government grants, and none of them had used the company to source their funding.

An old wound

They said they were embarrassed about the videos, and some had been trying to get the company to take them down for at least two years but with no success. One chief executive referred to the whole situation as an "old wound".

Cornelis Boertjens, who is in one of the videos, said he thought it was for a government department.

"I was completely under the assumption it was somebody from the Government, just wanting to record it, and show people, like hey, funding is available.

"It's 100 percent misleading - it looks like we used their services to get the funding, and we had nothing to do with them. At all."

Mr Boertjens said he was trying to have the video removed from YouTube, and hoped that would mean the website couldn't show it either.

The Small Business Assistance Centre said companies signed waivers, and no requests had been received to take videos down.

Follow Lauren Baker on Twitter at @LaurenBakerRNZ