Background on the Acquisition

After acquiring the bankrupt accounting startup Bench for $9 million late last year, Employer.com, led by CEO Jesse Tinsley, committed to honoring payments made by past customers. This commitment was shared by Tinsley on platforms such as LinkedIn and in discussions with founder Julian Weisser, where he stated, “We’re honoring all prepaid Bench services even though we will not have the revenue from that directly ourselves.”

Recent Customer Complaints

Despite these assurances, several customers have reported being asked to pay again for services they had already prepaid under Bench’s former ownership. A notable case involves a lawsuit filed by Qorum, a former Bench customer, which alleges that the company demanded payment for its 2023 tax return, despite it being covered under previous agreements.

Another anonymous customer expressed dismay upon discovering that they needed to renew their subscription in order to complete accounting books they had paid for two years earlier. According to correspondence reviewed by TechCrunch, a Bench representative explained that the new iteration, referred to as “Bench 2.0,” does not recognize debts or obligations from the previous ownership.

Employer.com’s Response

Employer.com’s Chief Marketing Officer, Matt Charney, has publicly refuted claims that Bench is charging customers for previously paid work, stating, “We have been, and are honoring pre-paid services for our customers.” He further claimed that Qorum’s tax return was provided without any requirement for additional payment, contradicting the claims made by founder Andrew Pietra.

The Road to Bankruptcy

Bench’s earlier business practices have also come under scrutiny. The company reportedly incurred losses amounting to $135 million under its previous ownership, facing challenges in integrating AI technology to replace human bookkeepers. The struggle with technological adaptation contributed to significant operational delays and an increasing backlog of incomplete financial records.

Consequences of the Acquisition

Many customers have alleged that they received misleading notices prompting them to click consent buttons that effectively waived their rights to refunds on prepaid services. Following Bench’s abrupt closure on December 26, 2023, just days before its acquisition was announced, numerous accounts remained unfinished.

Bench’s rapid downfall stemmed from liquidity issues, particularly after its principal lender, the National Bank of Canada, declined to extend an additional line of credit worth $7.7 million. The bank had previously provided a total of $51 million in support.

Aftermath and Future Considerations

While the acquisition of Bench was initiated almost immediately after its operational collapse, concerns regarding customer trust and service accountability continue to loom over Employer.com’s management. The ongoing lawsuit and customer grievances may pose challenges for Employer.com as it seeks to reestablish credibility in the fintech market.