An unnamed system error at Comerica Bank this week led to dozens of ticket brokers temporarily not receiving commission payments from Razorgator, the company said.
A total of 81 checks cut by Razorgator — 78 of which were sent to brokers — were affected. The checks totaled $143,000, and when they were deposited by the recipients, they were returned unpaid. But, according to Razorgator President and CEO Brendan Ross, the matter has been rectified and those payments are now going through properly. The company sends out live checks and does not use electronic Automated Clearing House (ACH) payments.
“All we expect the brokers and vendors to do is to re-deposit the checks and they will be paid,” Ross told TicketNews. “The bank has reassured me that it won’t happen again, and they’re sorry for the error. It was nice to see Comerica step up and deal with it quickly.”
Brokers were notified by telephone and email this week within minutes of the glitch being discovered:
Dear Valued Partner,
It’s been brought to our attention that our bank, Comerica, experienced a system error which affected several accounts, including Razorgator’s. Regrettably, as a result of this error, some recently issued checks may not clear upon first deposit.
Attached is a copy of the letter from Comerica with additional details. In summary:
-The issue was at Comerica and had nothing to do with Razorgator.
-You can rest assured that items will be paid by re-depositing the checks.
-If there are any issues, please provide your bank a copy of the attached letter or contact Kathleen Woodcock at Comerica directly.
We sincerely apologize for any inconvenience and thank you for your business and understanding.
Prior to Razorgator notifying brokers, the company had received a letter from Woodcock, a vice president of Private Banking at Comerica, apologizing for the mistake. “Please advise those that were affected by the returned checks that they can rest assured that the items will be paid by re-depositing the checks. If there are any issues, please give them a copy of this letter or have them call me directly,” she wrote. The bank did not disclose specifics about what caused the system error.
Despite Razorgator’s rapid response to the error — “We were very proactive,” Ross said — there were brokers who were not happy.
“They’re running too tight,” said one long-time broker who was a Razorgator client and requested anonymity. He said he recently began pulling his inventory from the exchange. “I can’t give credit to people who might not pay.”
The past couple of years have been tough for Razorgator, culminating in big losses from this past summer’s World Cup, which helped facilitate layoffs and a restructured business model for the company.
Ross was quick to dispel notions that the company is in any trouble, stressing that the company has turned a corner.
“We’re on a path to be cash-flow positive for the remainder of 2010 and all of 2011,” he said, declining to give specific figures. “We feel we have emerged from this challenging period.”