Bench Customers Allege Discrepancies in Service Commitment by New Owner Employer.com
Post-Acquisition Promises Unmet
After Employer.com acquired bankrupt accounting startup Bench in a fire-sale late last year, CEO Jesse Tinsley pledged on LinkedIn and elsewhere to honor past customer payments. "We’re honoring all prepaid Bench services even though we will not have the revenue from that directly ourselves," Tinsley said in an interview with founder and investor Julian Weisser.
Charging for Pre-Paid Services
However, some Bench customers say they’re being charged to get books or tax returns they previously paid for. A lawsuit filed on Tuesday by Bench customer Qorum claims that Bench required it to pay to get its 2023 tax return, despite having already paid for the service under Bench’s previous owners.
Lawsuit Alleges Misrepresentation
"Defendant Jesse Tinsley made negligent misrepresentations when he falsely stated that Employer.com would honor prepaid Bench services," the lawsuit alleges.
Customer Concerns and Confusion
Another customer, who requested anonymity, was shocked to learn they needed to renew their subscription to get accounting books completed when they paid for that service two years ago, according to correspondence seen by TechCrunch. When they questioned this, a Bench representative told them that "Bench 2.0" has no affiliation with prior obligations and that Employer.com couldn’t take on unpaid work.
Employer.com’s Response
Employer.com’s Chief Marketing Officer Matt Charney strongly disputes that Bench is charging for previously paid work. "We have been, and are honoring pre-paid services for our customers," he said. However, Charney’s claim is disputed by Qorum’s founder Andrew Pietra, who told TechCrunch that he was required to continue his subscription to get the 2023 tax return.
Background on Bench’s Financial Struggles
Under its previous ownership, Bench burned through $135 million and struggled to get AI to replace human bookkeepers. This led to long delays and big piles of books that still needed to be completed, according to former employees.
Aftermath of Acquisition
Multiple Bench customers previously told TechCrunch that Employer.com had also sent them notices intended to get them to click on a consent button that had them foregoing refunds on prepaid services. Many books and returns remained incomplete when Bench abruptly shut down on December 26 last year. Employer.com, a U.S. company, announced plans to buy the Canadian fintech less than 72 hours later.
Acquisition Details
The fintech’s abrupt collapse was caused by a lack of liquidity after its main creditor, the National Bank of Canada, declined to lend it an additional $7.7 million in December 2024. The NBC had already provided $51 million USD in credit to the troubled startup, according to previous filings.
Conclusion
The acquisition of Bench by Employer.com has raised concerns among customers about the commitment to honor past payments. While Employer.com’s CEO has pledged to honor prepaid services, some customers are experiencing difficulties in getting what they paid for. The controversy highlights the importance of clear communication and transparency in business transactions.
FAQs
Q: What did Employer.com’s CEO, Jesse Tinsley, promise regarding honoring prepaid Bench services?
A: Tinsley pledged to honor all prepaid Bench services, even though Employer.com would not have the revenue from that directly.
Q: What did a lawsuit filed by Bench customer Qorum allege?
A: The lawsuit alleged that Bench required Qorum to pay to get its 2023 tax return, despite having already paid for the service under Bench’s previous owners.
Q: How did Employer.com’s CMO, Matt Charney, respond to allegations of charging for previously paid work?
A: Charney strongly disputed the allegations, stating that Employer.com has been and is honoring pre-paid services for its customers.
