When Burnie first home buyers Lee Barry and Jaymee Goss took the big step of paying a deposit on a home, little did they realise they would end up with a wrecked credit record and nothing to show for it.
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The couple had a loan for a land and house package in Nairana Avenue in Shorewell Park, but the whole thing fell over when the company went into liquidation, owing money to Mr Barry and Ms Goss.
Mr Barry said he wanted to use their story as a warning to others.
"I just want people to be aware of it," he said.
According to the Australian Securities and Investments Commission (ASIC), there is an activity called illegal phoenixing.
IN OTHER NEWS:
A company is created to continue the business of an existing company that has gone into liquidation to avoid paying debts.
The illegal part is when the directors transfer the assets to a new company without paying market value for them, leaving the debt in the old company, which is then liquidated with no assets to pay creditors.
Master Builders Association CEO Matthew Pollock said phoenixing was something he did not like to see in the building and construction industry.
A Justice Department spokesperson said if a company had gone into liquidation, the main responsibility lay with ASIC.
"Within Tasmanian law, protections for consumers and sub-contractors exist in the form of security of payments legislation, and through the Australian Consumer Law."
An ASIC spokesperson said they couldn't comment on specific matters but strongly encouraged anyone with concerns about possible misconduct to report it: https://asic.gov.au/about-asic/contact-us/how-to-complain/report-misconduct-to-asic/
Warning signs of illegal phoenixing can include:
- the company fails and cannot pay its debts;
- it changes its name and a new company is registered, often with a similar name;
- the new company runs the same or similar business as the old one, sometimes from the same premises;
- the new company often uses the same websites or contact details;
- the people managing the old company control the new company.
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Leah McBey
As a southern New Zealander I love island life. So Tassie was an obvious choice after living in North America, Europe and the Pacific Islands. I've done a bit of everything but communication is the motif threading through my life.
As a southern New Zealander I love island life. So Tassie was an obvious choice after living in North America, Europe and the Pacific Islands. I've done a bit of everything but communication is the motif threading through my life.
