The Commerce Commission is warning business people that false invoicing scams continue, and that business people themselves are the key to stopping these scams - they should not pay for advertising they did not order.

Commission Fair Trading Manager Rachel Leamy said that the Commission has received 82 enquiries about false invoices since a company director, Ashley Guy Rhodes, and four of his companies were convicted on June 4 for making false claims that businesses had ordered advertising in magazines. A number of these enquiries appear to relate to companies associated with Mr Rhodes. Last week Mr Rhodes and his companies were fined a total of $130,000. They have since appealed their convictions and the level of fines imposed.

Ms Leamy said the best way of stopping false invoicing scams is to stop their income. Even if business people are tricked or bullied into authorising advertising they did not order, they should not pay.

False invoicers breach the Fair Trading Act when they falsely claim that a business had agreed to buy advertising. Even if they trick or bully the business into authorising advertising that was not agreed to they have still breached the Act and, very importantly, the business is not obliged to pay.

"Prevention is far better than cure," Ms Leamy said. "It is far better for a business that it does not part with its hard-earned money, than it is to take enforcement action to try to get it back.

"Business people must be aware that there are people who will deliberately set out to rip them off.

They must have effective ways of ordering goods and services, checking that they receive what was ordered and authorising payment."

Things businesses should do include:

  • Authorising advertising in writing only. Get the details of the advertisement including price and publication date in writing before agreeing to anything. NEVER authorise advertising over the phone or verbally.
  • It is best that only one person be authorised to order advertising.
  • If telephoned by a salesperson selling advertising, write down the date, time, person's name, magazine title, circulation, publisher's name, address and important points of the conversation.
  • If the caller claims their publication supports a charity or community group ask for details of the group and check them with the group.
  • Get free guidelines from Commerce Commission offices.

Tactics used by false invoicers include:

  • Falsely claiming they have spoken to the business person before and they agreed to advertise.
  • Falsely claiming that they have spoken to another person at the business who authorised the advertising.
  • Copying genuine advertisements from other publications, faxing them and falsely claiming that they are proofs for new advertisements.
  • Being extremely persistent in their claims that advertising was ordered.
  • Falsely claim to support charities or community groups.
  • Abusing, swearing at and threatening people who refuse to pay.
  • Using debt collection agencies to pursue unpaid invoices for advertising had not been ordered.
  • Taking action in the Disputes Tribunal, again, the advertising had not been ordered.

Media contact: Fair Trading Manager Rachel Leamy

Phone work (04) 498 0908, cellphone 021 662 773

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz