The Australian Competition and Consumer Commission has warned small businesses to steer clear of Australian Business Funding Centre Pty Ltd, a service that claims to offer help to small businesses interested in obtaining government grants.
Also known as Australian Business Financing Centre (ABFC), the company operates the website www.australiangovernmentgrants.org, which includes a survey for business owners that claims to help them determine what government grants are available for their business.
According to the ACCC, upon completion of the survey, users are prompted to pay between $497 to $701 to access information about their grants.
However, after paying, the ACCC says the businesses find out they are either not eligible for the grants or there are no suitable grants available.
Sign up for SmartCompany newsletter.
Free to your inbox every weekday
The website also shows a number of success stories from Australian businesses, which when contacted by the ACCC, revealed they had never received government funding via ABFC.
In a public warning, the ACCC alleges the conduct amounts to false or misleading representations about the service.
The business claims it has been operating in Australia since 1995, however using the Internet Archive tool, it can be seen the website was first established in 2009.
The website lists a contact address in Endeavour House, in Canberra. Upon calling the number on the website, SmartCompany was connected to an operator who did not know about the warning issued and attempted to sign us up for the service.
Emailing the website netted a similar response, with an automated message again encouraging us to sign up to the service.
In the fine print at the bottom of the website, it’s shown that the website is operated by Consumer Centre Inc, which is based in Dublin, Ireland.
Acting ACCC chair Dr Michael Schaper told SmartCompany the ACCC regularly receives reports of alleged scams but complaints about this business have been in “much greater numbers”.
“We’ve received 100 complaints in the last two years about this website, which is nearly one a week,” Schaper says.
“We were talking to some of the commissions from Canada and New Zealand, who have seen similar websites pop up.”
Schaper says while offering businesses assistance with government grants is not illegal, as long as the businesses using the service do actually receive advice.
“It’s not illegal for bona fide businesses to help out customers with government grant applications,” he says.
“The important thing to remember is that governments will never charge businesses for freely available information; $500 to $700 is a heck of a lot of money, especially if you’re an early stage business.”
Schaper advises businesses to conduct due diligence on the company before paying for anything, and always think about what it is exactly they’re paying for.
“Always check the legitimacy of the testimonials, and do a bit of an online search for the company or associated companies,” Schaper says.
“We got a reasonable number of businesses ringing us to ask if the website was legitimate.
“This is not the first government grant scheme we’ve dealt with, and I dare say it won’t be the last.”
Information about government grants can be obtained from www.business.gov.au and other websites ending with .gov.au.
SmartCompany has made multiple attempts to contact the ABFC for comment.