www.flippa.com Charging commissions/finder's fee even when no sale occurred. Australia Internet

I don't see how Deal Flow can be brokering businesses anyway.  They have an office in San Francisco and they have a broker based there called Mr. Toyne who's on their website who is not licensed.  As it's quoted in these references they are operating illegally as a brokerage and their broker is not licensed. 

allbusiness.com/does-a-business-broker-ma-advisor-need-to-be-licensed-to-sell-a-web-based-business-14234569-1.html

hillfarrer.com/userfiles/articles/Broker-article.DOC

cvbba.com/images/APMAA_Reg_Issues_3-17-2010.pdf

Before you deal with any broker that has a physical office in California please check if they are authorized to operate within the laws of that state.

As part of agreement where LOI was signed there is point where we can terminate at any time and in it there was NO mention about the finders fee policy. So giving an explaination that business was not sold etc doesnot apply. If business had true potential then it would have sold easily. So business had some issue thats why no one wants to buy it. I should not be responsible for that nor I should pay for something which there was no transaction. I would like to see a written policy about finders fee. Which flippa.com has failed to provide me. They have no standards about finders fee if they wish they will waive and if the don't wish they won't. It is basically a commission and they are trying to make the commission any way if there is a deal or not.  It is ILLEGAL to charge commission when no transaction occured. Basically they are forcing you to buy the business by trying to force a commission /finders fee on you. BE AWARE this is a unfair and ILLEGAL practice in most parts of the world. You cannot say oh you can do the due deligance and if you back out of a deal we will decide to charge you or not. I WOULD RECOMMEND TO AVOIID FLIPPA.COM ESPECIALLY DEAL FLOW DEALS BECAUSE OF UNFAIR AND ILLEGAL FINDER FEES PRACTICES. 

To Whom It May Concern,

As the person directly responsible for the transaction in question, I will shed some light into the story. Please understand that there is a Non Disclosure Agreement in place between the complainant and Flippa, and I'm therefore limited in the information I'm able to provide.

In September this year, the complainant agreed to purchase a business through our platform, subject to reasonable due diligence and revenue verification. Part of this agreement was to pay Flippa an administrative fee (/finder's fee), charged for facilitating the transaction and the accompanying due diligence. The complainant clearly identified through our system that they're happy with both - this action was stored and logged.

Approximately one week later, the complainant informed us of their wish to terminate the negotiations of the purchase, on the basis of information that was already made available to the complainant prior to agreeing to the purchase and placing an offer through our system, and can therefore not be considered reasonable due diligence.

As a result, Flippa terminated the negotiations and placed the property back on the market. Naturally, the complainant's behaviour resulted in substantial losses to both Flippa and the seller of the business, as placing an offer of purchase resulted in the business having been taken off the market for the duration of the complainant's "due diligence", preventing other interested parties from purchasing the business.

In general, Flippa always waives the administrative fee in question should a transaction not take place. We feel it is our duty to do so if there are issues that are discovered within the due diligence phase. In this case, however, as the reasons behind the termination of negotiations were such that were known to the complainant beforehand (i.e. before placing the offer and securing exclusivity over the purchase), we are unable to facilitate the complainant's request to waive the fee.

I should further elaborate that as a goodwill gesture, Flippa will not attempt to collect the fee in question. The complainant's account with Flippa will, however, remain closed until/if the invoice in question is settled as it's our duty to protect our sellers from buyers who place offers with no intention of following through.

Kind Regards,

Bryan O'Neil
Flippa Deal Flow