90 yr old faces losing her home over Blue Chip

Mrs. Gwendoline Harrison, a New Zealand pensioner was served with legal papers at her bedside this week. It involves the collection of a $300,000 mortgage that the franchise company, Blue Chip, sold her.

It appears she is $8,000 in arrears and attributes her illness to worry about being dragged from the home she has lived in for 60 years.

How a 90 year old found herself in such a sophisticated investment arrangement involving so many no-name finance and marketing shells says a lot about the consumer legal protections in New Zealand.

The lender in this case was TEA Custodians.

The Serious Fraud Office announced last week that they are investigating both Blue Chip and Bridgecorp.

As usual, the New Zealand Herald has been doing a stellar job of covering the story with the able assistance of EUFA, a spunky grassroots investor protection lobby group.

Professionals

The lawyers mentioned are from Sanderson Weir. They are listed on sandersonweir.com as Jonathan Flaws, Nicola Robertson and Julian Macmillian. Their address is listed on this site and they appear to serve both the New Zealand and Australia markets.

Mr. Flaws’ picture appears on their website.

The SOLUTION?

  1. Pass a law that requires a buyer to get a certificate of legal advice for all purchases of investments of and through a franchise.
  2. Make professionals personally liable for their advice (no BS liability shields).
  3. Fund test lawsuit to sue the 1st one that breaches their fiduciary duty to their consumer clients.
  4. No professional underwriter will deal with that or similar lawyers.

Simple, eh, Minister Dalziel?

Lawyer, heal thyself.

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One Response to 90 yr old faces losing her home over Blue Chip

  1. Carol Cross says:

    I believe that this solution IS possibly the only solution to the problem of unviable and unprofitable investments in franchises. But the problems in franchising are not known to the general public and governments would prefer to remain deaf, dumb, and blind as to the thievery that goes on behind the backs of the regulators. Wouldn’t there have to be some kind of public pressure to pass such a law?

    Wouldn’t the legal community would fight this or any solution that would “tame” franchising and interfer with the status quo that feeds so many in and around franchising who have immunity from lawsuits under the status quo of franchise law?

    Did you read the article Jun-Jul 2008 in the Franchise Times, USA, in which the author indicated that banks and lenders will now reassess their risk performance procedures and look at the failure of the franchisees in franchisor systems. This article even suggested that any failure rate over 10% in systems may make banks and lenders wary of exposure to these franchise loans.

    If the sub-mortgage scandal does rub off on the franchise industry in the US, will this help franchisees because there will be more transparency and the banks and lenders will DO their due diligence that will complement any due diligence that the prospective franchisee has done on his own?

    Your student!

    Carol

    Like

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