Advertising Scam Media Release Dec03 by H9ogoZc


									This advice from the then Minister continues to be valid as variations on these same issues
continue to occur in the industry. ARAMA strongly recommends that an order book be used
for ALL advertising orders and invoices be validated against orders. Members commonly
report receiving “mock up” advertisements that have been produced from websites or other
publications and so may appear familiar when presented for payment.


Tuesday, 30 December 2003

Fair Trading Minister Merri Rose today warned businesses to be on the lookout for
advertising scams.

Ms Rose said the Office of Fair Trading had received complaints from traders in Mackay and
Toowoomba who had been stung in an advertising scam.

"The Office of Fair Trading is on to the fraudster running the scam and needs help from
victims to gather evidence for a prosecution," she said.

"The modus operandi involves sending bogus advertising claims for tourism-based
publications, particularly dining guides.

'He gets graphic art work done by a firm in the town in which he is operating, and sucks them
into the scam by telling them about his proposed publications and promising he'll recommend
their business produce the -ads if they help promote the publication to their existing clients.

"He then sweet-talks local business into paying cash up front to secure an advertising
position in the supposed upcoming publication."

Ms Rose said the sting came when, after pocketing thousands of dollars in advertising fees,
the publication was never produced or distributed and the conman disappeared, leaving
graphic artists unpaid for their work and businesses with no return on their advertising

"By the time the local businesses realise what's happened, the fraudster has already moved
to another town to rip off more innocent businesses and design houses," she said.

"This man is not only swindling hard-earned cash from businesses for non-existent
advertising, but ripping off graphic artists and tarnishing their well-earned reputations in the

Ms Rose said small businesses, already under pressure from long hours and small margins,
should be particularly careful when considering advertising in new publications.

"Sizeable firms often have fraud prevention strategies such as purchasing approval policies
and procedures in plane, but small businesses, community organisations, clubs and
associations and charities often do not," she said.
"It is important that no matter how busy things get that businesses keep tight controls over
their advertising and undertake the correct checking procedures when paying bills to avoid
the costly mistake of failing victim to invoice fraud."

Fair Trading recommends that before ordering or paying for advertising, businesses:
     ask for previous editions of the proposed publication to be sent by mail;
     check the publication's circulation (Audit Bureau of Circulation);
     ask for written information on the publication;
     ask for referees:
     check with other advertisers to determine bona fades of publication;
     not be pressured into paying if you're not satisfied with the authenticity of the invoice;
     look over advertisements before payments and
     check for scam alerts with the Office of Fair Trading and ASIC.

It is also recommended businesses set in place, as a minimum, the following rules and
procedures to check all invoices and purchases carefully:
      routinely enter invoice details before payment;
      do not pay unless you have issued an order number and match all invoices to orders
        or only pay a deposit; and
      do not approve purchases over the phone - get it in writing first.

Most importantly, be wary of bills from traders you are unfamiliar with - check their
background by finding out if they have an ABN and a properly registered business name-
Phone the Australian Tax Office on 13 24 78 or the Office of Fair Trading on 1300 685 030.

Checks can be made on business name registration at ASIC's website and from your local
Office of Fair Trading.

More detailed advice on how to avoid failing victim to invoice fraud is available at

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