Business Practices Committee Report 77Financial Research Foundation (Pty) Ltd3. The Questions of 17 November 1998 |
On 17 November 1998 the BPC wrote the following letter to G Friedman of FRF:
"On 7 October 1998 the Committee informed you about its decision to undertake a section 4(1 )(c) investigation in terms of the Harmful Business Practices Act, 71 of 1988, into the business practices of FRF.
Would you now please furnish the Committee, as a matter of urgency, with the following information?
| 1) | The number (x) of new clients who entered into agreements with FRF during the latest financial year (y) for which annual financial statements are available. |
| 2) | Number of clams submitted to the banks within 6 months, >6 months ££ 12 months, >12 months ££ 18 months and >18 months during period (y). The total should match (x) in question 1. |
| 3) | The number and value of the claims (in question 2) submitted to the banks, classified by bank. The number in this question should match (x) in question 1, less the number of clients that had no claims according to the calculations by FRF. |
| 4) | The number of claims (in question 2) entertained by the banks and the amounts paid to clients, classified by bank. |
| 5) | The same information as in question four, but please classify the number and value by: (a) immediate payments by the banks (b) negotiated settlements (c) court orders. |
| 6) | Turnover (deposits received) of FRF for the financial years ended y, y-1 and y-2. |
| 7) | The number of clients and amounts refunded in terms of FRF’s "Money Back Guarantee (8) - Applies if client adheres to the conditions as stipulated in the conditions schedule". |
| 8) | Please define the "success rate" of FRF as quoted by the "consultants". |
| 9) | Please furnish the highest academic qualifications of each of your "consultants". |
Would you please also respond to the Committee’s letter dated 23 October 1998?"
On 7 December 1998 FRF acknowledged receipt of the Committee’s letter dated 17 November 1998 (9) and said that the matter was receiving attention. A reminder was sent to FRF on 1 February 1999. This reminder was returned by the Post Office marked "Unclaimed".
| (8) | FRF offered a money back guarantee which read: "In the event of the claim pay out being less than the up-front fee FRF will refund the difference to the client on settlement of claim, provided that the’ period of recalculation is not less than 5 years and all statements are provided or obtained at clients cost". |
| (9) | During June 1999 it was learnt that the High court of South Africa (Provincial Division of the cape of Good Hope, case 14795/97) on 21 January 1998 ordered that an order nisi issued on 26 November 1997 be ratified. In terms of this order Financial Research corporation (Pty) Ltd was placed under final liquidation. |