Advertised “Formal Packages” What to watch out for

cheapofcWeigh Up Your Options Carefully! You need to be really vigilant when hunting around for a formal “Package”. Not everything really is as it might seem. There are some seriously dodgy operators out there and unless you know what to look for, it’s hard to see the differences at first glance.

The following is really valuable advice on who and what to watch out for, and how to protect yourself.

Recent surveys showed that the Sydney (metropolitan) school formal market alone generates in excess of $192 Million per-annum in revenue. Estimates put the industry at $3.4 Billion nationally. That’s a huge volume of money being spent on the formal experience.

Further analysis shows why this is easy to understand. The 15-19 year old demographic doesn’t care who’s in government, what a barrel of oil is worth, what the global economy is doing or where interest rates are right now. There is no global or domestic situation that’s going to have any impact on their decisions when it comes to achieving their formal dreams and wishes.

Teens today are the most media and communications savvy generation yet. They understand fashion, popular trends and they’re well aware of their collective buying power when it comes to events. That being said, they’re not business or street wise enough to spot the differences between bona -fide business operators and shysters. They need solid and informed guidance.

It’s precisely their naivety that attracts the less desirable element into the industry but the volume of money available means that some operators have become slick enough to fool experienced adults too.

Formal Scammers – They’re out there.

They’re waiting to get their hands on your money and ruin your dream formal. They don’t care who you are, or how hard you’ve worked to get to formal night. They only care
about your cash.

Most people reading about a very large scam operation in the newspapers, or watching it on TV when the story broke in 2011, could understandably have thought that this was something new and that it was shut down almost as quickly as it had started up. What the media didn’t report is that this operation had been running successfully for as long as seven (7) years and had managed to stay under the radar of the authorities and the media for that long while it ticked over literally millions of dollars.

The operation was very sophisticated, involving marketing companies, web design companies, suppliers of things like beauty products and nightclub entertainment. Some of these were real and legitimate businesses who later discovered that they had also themselves been scammed, while others were bogus entities that were set up just to make this operation look credible.

The scale of this thing was astonishing. It was operating across several states and territories and involved hundreds of people. It ticket all of the criteria boxes for “organised crime”.

What you can do to prevent this sort of thing reappearing.

There are bona-fide, honest, reputable operators creating and delivering fantastic school formal products and services out there. You only need to follow these few simple steps to know for certain whether you’re dealing with one.

1/ Check References or Testimonials:

Any truly reputable company will have done plenty of these kinds of events, and if they’ve performed within acceptable parameters for compliance, quality control and acceptable business practices, they will (or should) have accumulated a significant number of clients sufficiently satisfied to put their opinions in writing. Being a part of the school community, they should be relatively simple to check.

It’s best to be even more diligent in checking their corporate credentials just in case.If they’ve done badly, there won’t be any visible references, however if anything has been reported to trading authorities, there will be public records of it.

2/ Check the credentials of the business:

Before people can do business on this scale, they need to be registered with the appropriate government authorities. These authorities monitor who does what and how people conduct themselves, and sometimes, when required, they can step in and de-register a business to prevent them from trading.

Once a business has been deregistered, that doesn’t mean they won’t still try to do business illegally and that’s when innocent consumers can get trapped. Thankfully, most of these things are pretty easy to check.

ASIC (Australian Securities & Investments Commission) is the federal government authority overseeing corporate activities in Australia. In order to be viewed as OK to trade, an organisation should have the following things, all visible through the ASIC web site…

If they’re operating under a business name, that name should be registered in the state of their address and valid, and they should state on web sites and all paperwork their ABN (Australian Business Number). (see www.asic.gov.au to check a name and / or ABN)

If they’re operating under a “company” name (such as if they have “PTY LTD” after the name), then they must be registered (Nationally) and have an ACN (Australian Company Number) and an ABN. (see www.asic.gov.au to check a name and / or ACN & ABN).

If using the ASIC web site to check a company out, which is always a great place to start, you should be especially aware of the following items that may be listed in the search results…

  1. Under “Status” – if the company is “Deregistered” then that means they no longer exist officially and the government has ceased their trading privileges. There will usually be a date of deregistration so you can see how long they’ve been out of business.
  2. Under “Former Names” you’ll be able to see all the other names that they might have traded under previously so there’s no mistake about who the organisation really is.
  3. Underneath that, there might be a list of dates and reports. This is normal for every company to display. You might see things like, change of address, change of directors, change of name or lodgement of reports & records. That’s all routine stuff. When you should worry is when you see the following codes and listings…
  • 578 – Means Liquidator appointed and that liquidator suggests to the court that the company should cease trading immediately.
  • 505R – Means notification of resignation or removal of liquidator after the assessment is complete.
  • 524F – Means presentation of accounts to the court and the company shut down.

If you see any of those kinds of entries, or a deregistered company, be aware that you’re dealing with a potentially illegal operation and there will be no measure of protection when things go wrong.

If the organisation you’re dealing with won’t give you their corporate numbers for checking, you may wonder what they have to hide.

If the organisation, and even an individual or “Sole Trader” doesn’t have an ABN, then that means they aren’t registered for GST, and if they’re doing business at this level without paying GST, again that should sound alarm bells that something’s wrong.

3/ Check out what business they are really in:

Because the High School Formal market is a relatively newly discovered market, and fairly lucrative, there are all sorts of people doing business in other “kind of” related industries that think they should take a stab at running formals.

Sometimes they can be event managers in areas like Corporate Events, Weddings and After Parties. They can sometimes be talent agents for entertainers or even booking agents for nightclubs. The thing to remember is that absolutely NONE of these types of events is even vaguely similar to a properly run school formal, NONE of these types of businesses have any direct knowledge of what’s required and the qualifications, licences, permits and expertise necessary for running a formal are not needed in any of these other areas.

Some of the most dangerous people out there offering to run formals are the ones that think “Hey, it’s not what we usually do but how hard can it be? I reckon we can do that!” You don’t want to bet your only chance on someone like that.

4/ Check with the venue:
Venues, and sometimes rogue booking agents “claiming” to represent them, often have their own packages, and they’re all trying to compete with each other so they tend to advertise the same sorts of features. They often also advertise the same kind of prices. At first glance, it all seems to look pretty well the same but you need to look hard to see what you’re really getting and what you’re really paying for.

The first and most important thing is to be careful of people who say they represent 5-Star venues when they really don’t. If you find venues such as branded hotels advertised in the companies marketing materials, or on their web site, don’t be afraid to call the functions department of that venue directly to check whether the company you’re dealing with is actually an authorised agent of that venue.

5/ Get it in writing:

Anything you’re offered, promised or guaranteed cannot be considered as real unless or until you have it on an official letterhead or branded email. Make sure it’s specific, detailed and contains all the right elements such as company ABN, dates, name and title of the person you’re dealing with.

In the case of function bookings, there have to be quotes, contracts, terms and conditions and there has to be a copy of everything for you to keep in your own records.

If anyone is not willing to give it all to you in writing, then you should view this as extremely suspicious and start checking.

4/ Never deal in cash:
Real companies with real bank accounts have invoices, EFT, cheque systems, Paypal accounts and Bank Merchant Facilities. They can process any type of payment so how they recieve your money is not relevant. If anyone asks for cash, this is not normal so beware!

5/ Site inspections are no solid guarantee:

If anyone offers you a venue inspection, by all means go and take a look but be sure to ask that an actual functions staff member from the venue is present, that you get their business card, and call the venue to check that the person you met actually works there. No venue should ever offer you a site inspection unless the room they’re offering you for your formal is available to see at that time.

6/ Watch out for the “hidden” costs!:

The package may mention things that cost more than the advertised price. For instance, you might see a package that costs $89 per guest and the venue will be happy to provide a photographer, a DJ and security guards. What they don’t tell you is that the photos cost $15 each, the DJ costs $700 and security guards are $80 each per hour. Before you know it, that $89 becomes $125. Then add GST and you have almost $130.

Then you may want some decorations, and some invitations, and a projection screen, and once you add all of those things into the mix, your “Real” price per guest winds up being $165 and you’re doing all the running around yourself.

Make sure you’re getting an “All-Inclusive” package with everything you want built in for the one price per guest – guaranteed!

7/ Don’t be fooled by the stuff that’s free!:

People will try to impress you with lists of features that make their package sound big and exciting. They use things like “Dance Floor”, “Mood Lighting”, “Breadrolls”, “PA System”, “Printed Menus”, “Table Linen” and “Stage Areas”.

What they don’t tell you is that these things are not only part of every package out there, but they’re free anyway. They’re not any kind of special extras. You should eliminate these things from your list when comparing packages.

If people are offering enticements such as free extra entertainment, celebrity guest appearances or intangible things like that, be very wary that they may be trying to take your focus off the fact that something’s missing somewhere else, in either their package, their qualifications, their authorisation or their experience.

8/ Beware of packages that offer “X number of teachers come free and get free wine”:

Without getting into too much detail about the areas of the Liquor Act this sort of statement in marketing actually breaches, let’s concentrate for a moment on the reasons why they want teachers present.

The short answer is that the venue doesn’t want to spend money on more than the very least number of security guards than they can legally get away with having. They  therefore expect that by having a whole bunch of teachers present, that the teachers will assume various security / ushering / crowd control / access direction duties, just as they might do in the school environment.

What they won’t tell you is that this is completely illegal in NSW and any venue doing this could lose its license. It’s also illegal for teachers and they can actually be locked up for doing this. You see, licensed premises in NSW are very scary places under the law. It’s the most highly restricted and regulated ground on which you can walk. Once a teacher attending a formal literally sets foot on the premises, he or she is, from that moment, no  different to any other guest, and hold no authority or special power or privilege above any teenager. If you’re a teacher, parent, principal, deputy, year advisor, board member or any other title you place on it, you have absolutely no duty of care, no elevated station, no responsibility, no rights above anyone else in the same place.

In these places, only people properly licensed under the Security Industry Act who have been contracted, with all of the relevant credentials, insurances, bonds and experience are permitted to stand a post, direct foot traffic, restrict other people’s movements or apply any kind of security duty whatsoever. Any person who takes on any of these roles who is not properly recognised under state law, can actually be arrested and charged for doing so. It’s pretty serious stuff and not taken lightly by the government.

If a venue is offering free teacher attendance in high volume (more than 2 or 3 heads), this should be viewed as very dubious indeed.

The NSW government, in all its wisdom, has decreed that school formals should have one (1) licensed security guard per 100 attendees. While I salute the initiative to have stepped towards having something made mandatory in the way of security, I think that the way they’ve arrived at this number is farcical.

When figuring out how many guards you’d need for a school formal, there are many factors that need to be considered in the calculation.

Here’s a basic list you can use to help decide if the package you’re being offered is including the right number of security guards to keep your formal running safely and smoothly…

  • How many access points are there into the function area? Stairwells, lifts, escalators, doors that go from the public space directly into the formal space. You’ll need a guard to cover each one.
  • How many guests are likely to attend? Keep in mind that 200 rowdy teenagers cannot realistically be controlled, and in the event of an emergency – evacuated, by only 2 guards. My recommendation just on this is 1 per 50 minimum.
  • Will there be alcohol served? By what method and how is the control of that method going to be maintained and policed? Guards are RSA trained and should be utilised to administer wrist bands and alcohol service areas to ensure that RSA is being observed and that minors do not access liquor.
  • What’s the background of the school and, more importantly, the year group? Are these teens from an area with a big drinking culture, or are they a particularly naughty year group? These things affect the number of guards you may need.
  • What kind of security measures will be in place for their arrival? Will there be bag
    searches, breath tests, metal detection and screenings for contraband and whether people have been drinking before attendance, validation of tickets and guest names registers kept? Some of these things are required by law and all must be done by security staff. How many will you need to administer these checks?

Security at formals is a really big deal. Parents expect it, insurers demand it and the government requires it to be done properly. Short cuts lead to misery in this area. Trust me on that.

9/ Compare “Like” with “Like”!:

Basically, this means, research the venue as much as the package. You may have 2 different venues offering basically the same package for the same price but one might be a 5-Star Major International Hotel and the other one a 2-Star seedy nightclub being offered as “5-Star”. That means that although the packages sound the same, there will be vast differences in the comfort of the venue, quality of the service and the standards of the catering.

Of course if there are two or more “agencies” offering the same venues, check which company is actually authorised to represent that venue, chances are only one will be. Make sure that you compare things fairly and with good research.

10/ Don’t buy only based on price!:

This is the formal! You don’t get a second chance to get this right.

Let’s say your formal is costing $200 per ticket. Outrageous? Maybe! Now consider that many people will pay 3 times that much for the half-hour limo ride to get there. Still outrageous? Maybe not so much!

There’s an old saying… “Would you prefer the meal you’d rather pay for, or the meal you’d rather eat?”

At the end of the day it’s not about “Price”, it’s about “Value”. Forget how much you’re paying and start to think about whether what you’re getting is worth that price to the ticket holder. If your only motivation is the lowest cost, you will always get the lowest product.