The Economic Development Ministry said businesses in New Zealand were at risk from the fraud, but it was confident none had fallen victim.

It has written to all companies with carbon credits registered on its database, reminding them to guard their account details and passwords.

The ministry said hoax emails were sent to businesses in several countries aimed at persuading them to click on links that took them to fake websites, where they were asked to key in their account details and passwords.

Such “phishing” scams are commonly used to defraud banks, but ministry spokeswoman Emilia Mazur said it was believed to be the first time the US$135 billion (NZ$196b) carbon credit market had been targeted.

Quoting Hans-Juergen Nantke, head of German carbon credit registry DEHSt, Reuters reported that carbon credits had been stolen from six German firms and that others in the European Union and in Australia, Norway and New Zealand had been targeted.

These countries were at risk because they allow credits to be transferred overseas.

The ministry checked its database at the request of the United Nations Framework Convention on Climate Change. Mazur said no New Zealand firms had transferred credits overseas since the scam came to light. None had reported thefts.

She was unsure how the fraudsters planned to cash in the credits. “I personally wouldn’t know what to do with carbon credits. They don’t seem to take them down at McDonald’s.”

Scam threat to NZ firms – technology | Stuff.co.nz.

COMMENT

All I can say is that the the scheme itself should have never been there in the first place as it is based on cooked up research and now we find that it is actually causing new scams to arise. It was a matter of time I guess.

Kiwi celebrities are being targeted by social networking frauds, who are forging Twitter and Facebook accounts in their names.

False profiles are being created in the names of sports stars such as All Black captain Richie McCaw, Black Caps skipper Daniel Vettori as well as broadcasters and TV personalities.

The fictitious sites are fooling fans and friends into believing the profiles are real.

Internet safety watchdogs say creating a bogus website is illegal under the Crimes Act, and those targeted should take their concerns to police.

NewstalkZB host and Herald on Sunday columnist Kerre Woodham was shocked to discover this week that someone had set up a fake Twitter account in her name.

The page, which has 16 followers, writes updates from “kerrewoodham” such as “well thank god thats [sic] over with. need gin! NEED!”

Woodham was alerted to the fake site after someone sent her an email saying they were following her profile.

“I don’t use Twitter and I don’t even drink gin. It’s ridiculous,” she said. “I hate the anonymity of it. I’m stunned people are allowed to come on at face value. It’s kind of irresponsible.”

Two of Woodham’s Twitter followers are Victoria Cross recipient Willie Apiata a fake Twitter profile claiming to be written from Afghanistan and TV3’s Campbell Live host, John Campbell his real Twitter page.

Last year, Paul Holmes discovered a Twitter account in his name, despite the broadcaster never setting up an account.

He wrote in his Herald on Sunday column: “The Twitter site that claims to be mine is not. I have never Twittered in my life. I would not know how.” There is also a fake Facebook page under Holmes’ name.

Dancing With The Stars host Jason Gunn found himself fooled by someone pretending to be former Good Morning host Mary Lambie on Facebook in 2008. The fraudster was so convincing that he agreed to be her “friend” on the site, giving the fake user access to his personal information.

Gunn has an official Facebook page, but rarely uses it. If he found someone deliberately defaming him on a social networking site, he said he would not hesitate to contact police.

Read the rest of the article here >>>

The article makes mention on several occasions that pretending to be someone you are not is a criminal offense and the article closes by advising that if you find yourself to be the victim of an impostor you are to go to the police.

Identity Theft, Harassment

The article mentions that people who fin themselves a victim of such practices as described in the article, should go the police as it is according to Martin Crocker a crime to act as someone else. What Crocker appears to overlook or deliberately does not mention is that it is not as clear cut as it may seem.

Harassment Act 1997

When someone sets up a webpage (or uses documents like passports) to pretend they are you is what is considered identity theft. Sometimes on social networking sites, people can set up a page which looks like you made it, but it says mean things about you and makes you look bad. This is a form of harassment and any kind of harassment – online or off – is against the law. I think it is not too hard tp imagine this being a form of civil harassment, that could be stopped along civil lines besides using the abuse complaint options of different social networking sites.

Going to the police is for a criminal complaint is the next step. The first thing that comes to mind reading the article is criminal harassment. Section 8 of the Harassment Act 1997 reads:

8. Criminal harassment – (1) Every person commits an offence who harasses another person in
any case where –
(a) The first-mentioned person intends that harassment to cause that other person to fear for –
(i) That other person’s safety; or
(ii) The safety of any person with whom that other person is in a family relationship; or
(b) The first-mentioned person knows that the harassment is likely to cause the other person,
given his or her particular circumstances, to reasonably fear for –
(i) That other person’s safety; or
(ii) The safety of any person with whom that other person is in a family relationship.

“Safety” is defined to include a person’s “mental well-being” and I guess your mental well being could be seriously affected where someone is making you look bad purporting to be you.

But Crocker is talking about fraudulent.

Crimes Act

The Crimes Act sections that originally dealt with matters this were the old and repealed Crimes against reputation. Other options that may be open here are:

• criminal nuisance Section 145 Crimes Act whereby safety is “safety” analogue to the reasoning in the Harassment Act is understood to also include mental health;
• Obtaining or causing loss by deception Section 240 Crimes Act, which appears to me gives better options and carries a higher penalty.

As far as I know there has not been any criminal case law that deals with the matter of fake profiles so why not make yours the first. What I wonder though is what will happen when you do walk into the police station. I doubt, without showing considerable losses caused by the actions of an impersonator, whether there will be any serious attention for you matter.I could just hear the “this sounds more like a civil case to me” coming from the other side of the desk. And in all fairness there is plenty to deal with on the plate of any police officer. I am not sure whether this should get criminal priorities unless there is an actually good reason to do so.

In a statement, the S.F.O. said its investigation had found “ insufficient evidence to provide a realistic prospect of conviction” against either the company or its directors.

Read the full article here>>>at  NYTimes.com.

News release
WARNING: Illegal Share Offer – Inertialess Drive ZPE (2010) Limited
The Securities Commission warns people who have been invited to invest in Inertialess Drive ZPE (2010) Limited that its share offer is illegal.

The Securities Commission has banned a document offering shares in Inertialess Drive ZPE (2010) Limited. The offer is illegal because no prospectus has been registered, and there is no investment statement.

The company is based in Mount Maunganui and Ken Pedlar is its sole director and shareholder.

“In New Zealand, most offers of investments must have a registered prospectus and an investment statement,” the Commission’s Chairman Jane Diplock says. “These documents are important to allow people to make an informed decision about investing.”

The Commission understands that offer documents were sent to people who responded to advertisements by the company in the Bay of Plenty Times in December 2009.

The Commission warns people about buying securities that do not have the required offer documents.

“Under New Zealand law anyone who has subscribed for securities in offers that are illegal is entitled to have their money refunded,” Jane Diplock says.

The Commission had previously, in 1998, banned advertising for shares by Inertialess Drive Technologies (1995) Limited (now liquidated) because there was no registered prospectus. In 2000 the Commission also banned advertising for shares in Inertialess Drive Corporation Limited for the same reason. Mr Pedlar was involved in both these companies. The advertisements in the Bay of Plenty Times are targeted at former shareholders of these companies.

Ends

Contact: Poly Banerjee 04 471 7666

A video from KTRE (ABC 9) explains:

And this is not the first time warnings like this have been broadcast. Last year the Better Business Bureau warned against similar scams. I guess the old rule still applies: if it sounds to good to be true it probably is.

Twitter is used to approach those in need for (extra) cash to take part in all kinds of work from home “opportunities.”

From what I understand from the better business bureau some of the names of these businesses involved are:
EasyTweetProfits.com, from which you can buy a starter pack for only $195, with a weeks free trial. Yet the trial starts upon your order so by the time you may get the CD (especially if you are overseas) the trial may well be over and you may find yourself in a monthly fee scheme that is taken from your credit card of which you so kindly provided your details.

The finer the print the more important you read it I guess.

Other companies mentioned are:
Make-money-on-twitter.com, TwitterProfitHouse.com

At the same time many others like this may have well been and gone again. With these schemes it very easy to relate and drop the original site to have it pop up again under a new name with a new url.

Some of the red flags:

• The “job” is actually a money-making scheme and doesn’t provide actual employment.
• The work-at-home scheme claims that you can make lots of money with little effort and no experience.
• You have to pay money upfront in order to be considered for the job or receive more information.
• The exact same tweet touting the program is posted by many different Twitter users. The links in such tweets could lead you to scam sites or install malware onto your computer.

So, twitter users keep your eyes open and don’t take the bait.

The Evolution of Fraud

01/17/2010 07:21 PM

As business has grown more complex, fraud has evolved and adapted accordingly. Multi-level marketing (MLM), the most common form of pyramid/ponzi fraud, is the product of years of evolutionary adaptation in the scam and swindle field, matching the adaptation of the legitimate marketplace. Public awareness and law enforcement always lag behind new forms of fraud. The success of MLM’s and other financial Ponzi’s at duping millions of people, rich and poor, educated as well as illiterate, shows that public understanding has not caught up to this new mutation.

A study of consumer fraud’s evolution shows three stages that parallel the three levels of development in American business. America evolved from leading the world in manufacturing (now China) to becoming the financial capital of the world (now moving to Asia/Europe/Middle East), to our present status as the world leader of consumer-purchases driven by marketing.

The Three Stages of Consumer Fraud:

(1) Product-based fraud in which consumers are tricked into buying defective or even non-existent products or to pay far more for a product than is worth

(2) Financial fraud in credit, banking, insurance, mortgages, stocks and bonds.

(3) Marketing fraud, in which consumers are induced to personally identify with the fraudulent company and to help it defraud others by becoming part of the marketing program themselves with their own purchases and personal promotions.

All three are in operation today but public awareness is now quite strong in the first stage — product frauds. Regulation is also well established. “Lemon” laws, return policies, product safety rules, and trusted consumer alert publications are available now that help to protect people from the old plague of bad products and price gouging.

The second stage — financial fraud — is still rampant, but public awareness is growing. We now know about crushing credit card terms, unjust banking fees, predatory pay-day loans, and the disaster caused by “sub-prime” mortgages. In 2010, America may even get its first consumer protection law aimed at “financial” products. The new law and the growing anger at predatory lending and banking practices show that public awareness and consumer protection are starting to catch up in this area.

The third stage — marketing fraud — is the highest and newest state of fraud, the one which the public is most vulnerable to, has least awareness of, and has the least legal or governmental protection from. This is area in which Ponzis and Pyramids and multi-level marketing operate. There is not even a dedicated law against pyramid schemes in America. Many other countries also do not have anti-pyramid laws. Canada, for example, has some regulations on multi-level marketing (MLM), and it has anti-fraud laws, but it appears helpless to make the connection between the two. So “endless chain” buy/sell scams that wipe out the savings of 90-99% of participants are safe to plunder Canadians and Americans and are spreading worldwide as “free enterprise.”

Read the rest of the article here >>>

As requested by Robert here some further elaborations.

Marketing Fraud

Marketing fraud as it appears to transpire from the article is an extreme version of what we know as false advertising, whereby claims are made about a product, service or business opportunity that are actually know to be invalid, false and deceptive. In that sense the “marketing fraud” is a species of false advertisement be it a more insidious one.

The modus operandi that transpires from the article is most certainly one that is recognizable. At the same time however it seems to me that the methods used for what is classified as marketing fraud are just what marketing nowadays is all about. Coca Cola is not just a drink, it is a lifestyle, Nike is more than just the next brand of sports shoes, if you want to be glamorous you need certain makeup and other feminine things,and to appear successful you need that certain car on your driveway and wear your Armani suit. Whether that is the right way or not, it is exactly like that, and it has always been like that.

It is important to note this because in my view the methods used to market the pyramids and Ponzi-schemes do not essentially differ all too much from normal marketing efforts. Where the difference comes in is in that these otherwise considered legitimate methods are now being used for the promotion of illegitimate and even illegal opportunities. Professional services are being rendered for illegal purposes. In that sense some participants in the marketing industry may be assisting in the commission of a consumer fraud. Whether that is willingly or knowingly still remains to be seen. For the user of the end product of these services this is of course different.

Lack of Enforcement Creates an Air of Legitimacy

In my view what makes things difficult is indeed this lack of enforcement . This creates an air of legitimacy that is actively being played out for the benefit of the schemer. In most legal systems some form of a rule applies that you are innocent until proven guilty. And that is where the problem lies with many of these pyramid schemes. Due to a lack of enforcement many will never be proven guilty.

I think we both agree that there appears to be a lack of enforcement of the regulations concerning pyramid schemes especially those that are disguised as a legitimate MLM, we all know which ones we are talking about and if not I suggest you have a look at http://www.pryamidschemealert.org. (PS do not mistake the extension and use the .com or .net domain!!!). At the same time it is good (and for now disregarding the lobby efforts) to place oneself in the shoes of the enforcement agencies involved. On many occasions, the organizations responsible for enforcing the law and regulations concerning pyramid schemes can be typified as understaffed and underfunded and at the same time with an enormous if not overwhelming caseload. So, ….priorities will need to be made. The simple fact is that in matters of pyramids disguised as legitimate MLMs and Ponzi schemes,  are often considered to be complex, read costly and with a relatively lower chance of success because of the existing rules and regulations.

Lack of Clear Rules: Shades of Grey and Deceiver= Believer

Both false adversement-advertisement and pyramid schemes- MLM appear to be situated in areas where the law shows considerable grey areas where the question of legal versus illegal is not that easy to answer straight forward. There in both instances no clearly defined boundaries and it is hard to do so since both areas of law also need to take into consideration the legitimate business interests of those active within the respective jurisdictions. As a result, investigations and prosecutions are usually complex, time consuming and costly with a relatively lower chance of success. Where priorities need to be made it is easy to imagine that enforcement agencies are not too keen on picking these case up also considering that they tey can usually pick and choose  from an incredible pool of simpler case with higher chances of success. In that respect, and speaking from previous law enforcement experience, these cases will easily end up in the “too hard basket”.

At the same time the lack of enforcement makes it possible to exploit this situation by presenting it as “we have not bee prosecuted or convicted for fraud, therefore we are legitimate.”  That is by the way the exact ploy you see in so many advertisements or the FAQ sections of such schemes where they have a net presence.

And besides that from an enforcement perspective, where do you start and stop? Essentially everyone in the pyramid is both perpetrator and victim, the latter with the exception of a very very very very select few at the top. Subsequently there is the matter of intent. It is all too easy for me to say that based on some simple facts and calculations, that where pyramids are being described as a business opportunity, a proven system, knowing full well that 99% of the participants fail, would therefore have to qualify as a b.s. story and false advertisement. But many that are actively promoting these ‘business opportunities’ and ‘proven system’ actually believe that that is exactly what they are. Some,, even after failing miserably and losing everything will still be convinced they are dealing with a genuine opportunity, if only because they were made to believe that failure is their own fault  because ‘they were not plugged in’ enough.In many instances, what you and I may consider to be a DECEIVER is actually a devout BELIEVER.

These people of which there are – as you and I both know – do not promote these schemes with the intent of deceiving someone. No: they actually believe that this is the best opportunity around. Why? Because they have already been brainwashed by those at the top or behind the opportunity itself. Others may fear the sense of social  loss once stepping away and rather choose to ignore the facts or rationalize their actions.

There is in my view a clear and present need in many jurisdictions for clear an enforceable rules in these matters so as to prevent these schemes from being stated in the first place. And in a country such as here in New Zealand where class action is a virtually unknown idea, civil action by victims are, for financial and emotional reasons hardly ever an option. So, people end up taking their losses  an start again from more than once from scratch or move on to have a job again.

Finally

Thanks Robert for this great article since it seems that the first step in preventing people for becoming a victim in the first place is by educating them and as always you did a great job in that. I wholeheartedly agree with you that there is insidious abuse of marketing through which people are being preyed upon. At the same time I can’t help thinking that there is more to it, as in the end the most compelling and alluring marketing campaigns seem to be focusing on those things that have no longer anything to do with human needs and all with human weaknesses such as hunger for power, status and materialism or unbridled consumerism. Perhaps the success of these ‘marketing frauds’ are more than just that and actually also a symptom of a sick society. But this is not the place to discuss that.

What stands however is that in many instances even the hardest evidence does not seem to be convincing for those that have been drawn in completely, even their own failings do not always lead to a reality check. The book Merchants of Deception (see on the left) offers some great insight in how this may work out.I have seen first hand how some actually are so fat removed from reality that they needed to be deprogrammed, as if ythey were brainwashed, indeed like you mentioned in your article similar t cult members.

Therefore your work and that of many others in exposing these practices is probably the best that can be done in the current circumstances and different legal climates. Additionally and probably we are in dire need in most jurisdictions for clear, concise and most of all enforceable legislation. Thank you for this great article.

Pastor Joshua Avia of the Hosanna Baptist Church Lower Hutt called members to the front of the church to pray for wealth, then ran $10-a-head prosperity evenings at which he introduced them to fraudster Krishna Veni.

Veni was sentenced last week to 12 months’ home detention for using false documents to secure $15 million of loans for 66 unsuspecting clients. She was found to have used scissors and a photocopier to create fraudulent mortgage applications without the applicants’ knowledge, allowing them to get bigger loans than they were entitled to.

It is estimated more than $1m was lost and two people lost their homes in mortgagee sales.

Mr Avia said members of his church had taken out loans with Veni and many were now struggling to pay their mortgages. He regretted introducing them to Veni, but said he had no idea at the time that her loans were dodgy.

Read the rest of the article by Emily WATT here >>>

With about 1000 commercial premises in Albany and North Harbour, the business area has proved a popular target for thieves, North Shore police area commander inspector Les Paterson says.

“This is representing a big chunk of our commercial property crime.”

But the sharing of information between police and the North Harbour Business Association on crime and suspicious activity has contributed to a decrease in burglaries, he says.

Read the rest of the article here >>>

Association general manager Peter White says: “It pays to always be a step ahead of the scammers.”

He says one of the scams involves a person emailing to book a group dinner.

A man who introduces himself as Cole Parkinson from Glasgow, Scotland, makes a booking for 10 persons for three consecutive nights.

He then makes an initial deposit of $1500 with the promise of paying for any other additional bills on the last night.

“They book and pay by credit card and then cancel and get you to pay money back into another account,” Mr White says.

Mr White says the Browns Bay Business Association recently alerted its members about a retail scammer that has victimised a shop.

The man calls into a shop and quickly grabs two retail products.

He then goes to the checkout saying his mother-in-law has had a reaction and tries to get a cash refund for the two products he hasn’t bought.

The man talks really quickly like he’s in a hurry and flustered.

The shop owner says the man had victimised them before and came around to try to dupe them the second time.

“He knew I was on to him today so he left minus his products and any money.

“I suggested if the reaction was causing his mother-in-law significant distress and discomfort he should take her to a doctor,” the shop owner says.

Mr White says he has issued an alert to all their members who might be caught off guard by these scammers.

Source: STUFF

Why Employees Steal

What is probably more important is the reasons why employees steal.

“Because they need the money, because of job insecurity, out of greed, duhh”

All those reasons may be there but the simple fact is that most employees steal because the opportunity to do so is there and at the same time there often is little fear of being caught or discovered. While opportunity is most important, there may be other relevant factors. Low morale can lead employees not only to steal, but can also lower productivity. Feelings of being wronged or mistreated may ust offer that rationalization when the opportunity presents itself. The same applies to feelings of under-appreciation.
Lack of punitive measures in place or there is a lack of preventative and detection measures including but not limited to appropriate policies and procedures and control measures are similarly factors that could lead to an increased risk of employee theft and fraud.

10-80-10

There is this sort of golden rule that 10 percent of the employees will not steal no matter what the opportunity, 10% will steal in any event and for 80% it depends on the circumstances and the nature of the opportunity, including but not limited to chances of getting caught and potential consequences.You challenge as a business owner/manager/director: make sure that opportunities and possibilities to rationalize the actions are kept to a minimum.

Address Opportunity

It is noted that no system will ever be completely 100% fail safe. Where motivation is high people will ind a way. Opportunity essentially boils down to: procedures, employee autonomy and perception. Procedures should provide checks and balances with inventory, cash, time and expense records, and the list goes on so as to minimize or eliminate the opportunity for an employee to circumvent controls. Implement extra layers and let your employees know about them.

When employees have a high level of autonomy, consistent oversight is a must. The employee who works with little or no supervision has incredible opportunity for theft and random checks and redundant monitoring systems limit opportunity.

The more employees believe they will be caught, the less likely they are to steal. This perception is vital. You can promote this perception through effective training. Communicate an anti-theft message clearly to all hires early and often and tell your employees what is expected from them. Let them know what theft is – not only outright stealing, but also things such as taking a long lunch break without approval, using sick leave when not sick, doing slow or sloppy work, or coming to work late or leaving early. Ensure they understand their roles, responsibilities and are not having problems. Finally, train ALL your employees to recognize theft – this can reduce opportunity.

When Theft Takes Place

When employee theft is discovered emotion driven reactions are often there: DO NOT react on the basis of your emotions. Sure, you feel violated but remember  this is a business problem and addressing it in that frame of mind will produce a faster resolution and help prevent more theft.Don’t. Not only can your emotions cause more problems, but also you could potentially open yourself up to other liabilities. Remember that employment law is a minefield and a personal grievance is the last of what you want.

Furthermore learn from your incidents!

Facts, Facts, Facts: Investigate

If you have legitimate suspicions, you should conduct an investigation. Legitimacy is based in the facts, evidence and not from rumors, gossip and hunches. Investigations need to be impartial and facts based. Consider us instead of doing it yourself as professionals like ourselves have the required professional and emotional distance. Moreover in nowadays IT driven business environment it is all to easy to make mistakes, and the same applies to interviewing potential witnesses. Do not accuse before an investigation is complete and even then, be very cautious. The word “theft” implies an intent to steal and employers who throw around the term can get into trouble.

Whenever you do find evidence of employee theft, start an investigation immediately. The longer you wait, the more theft can occur, evidence could be corrupted and the more other employees see the damage being done. Prompt investigations send the message that theft is not tolerated and that you are watching. Most of all: be honest with your employees and they will usually reciprocate. It’s hard to expect your employees to be honest if you aren’t honest. The example you set yourself goes a long way.

How Am I Doing?

You may want to know by now how you are doing, what opportunities there are in your business and what to do about it.why don’t you contact us and see what we can do for you.

For anywhere between $250 and $1500 (for most businesses. Depending on the size and nature of the business and operations) you could opt for a RISK ASSESSMENT to identify where you weak spots are.
You could consider going a step further let Dierckx & Associates help you closing the gaps, evaluate your suspicions or investigate incidents and train up your staff members so they learn to recognize the signs.

I look forward to hearing from you and see how our integrity management services may serve your business. There is nothing to lose as the first telephone, skype, email consultation (up to two and a half hours) is free. So don’t wait and contact us now.