Business magazine convicted for false invoicing
22 April 1998
Commerce Commission action against false invoicing has continued with a business magazine, the Taxation and Business Examiner Limited, being convicted in the Waitakere District Court of breaching the Fair Trading Act.
Commission Chairman Peter Allport said that false invoicing is a major problem in New Zealand, and involves businesses being tricked into paying for goods or services they did not order.
Most cases involve invoices for advertising that was not ordered, though this one involved subscriptions to a magazine aimed at small businesses. Taxation and Business Examiner's salesperson telephoned businesses to sell subscriptions to the magazine, but only six percent of calls resulted in sales of subscriptions.
"Overall, false invoicing is a scam that costs New Zealand businesses millions of dollars a year," Mr Allport said. "We have completed court action against four companies, have action against four more companies before the courts and will take further enforcement action as necessary."
Mr Allport said that this was a unique case because of a serious medical condition suffered by the company's manager and principal shareholder, Mr Frank John Fenton.
In a joint submission with the company, the Commission withdrew all but one charge against Mr Fenton, and the company pleaded guilty to making a false claim that a subscription had been ordered, when it had not. The Commission submitted that it was appropriate in the circumstances of this case that no fine be imposed.
However, Mr Allport warned that if Taxation and Business Examiner continued to be published and issued any further false invoices, then the Commission would not hesitate to take further enforcement action.
Media contact: Fair Trading Manager Rachel Leamy
Phone work (04) 409 0908
Communications Officer Vincent Cholewa
Phone work (04) 498 0920
Commission media releases can be viewed on its website www.comcom.govt.nz