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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-10-23 Daily Xml
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ADVERTISING, FALSE BILLING

Ms BEDFORD (Florey) (14:20): Can the Minister for Consumer Affairs inform the house about false billing advertising scams and what is being done about them?

The Hon. J.M. RANKINE (Wright—Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Volunteers, Minister for Consumer Affairs, Minister Assisting in Early Childhood Development) (14:20): False billing scams have been in existence for a number of years and the problem occurs right across Australia, and South Australia is no exception. However, since November last year, the problem has been growing and, in fact, I understand that complaints this year in South Australia have reached unprecedented levels.

Businesses are charged for advertising in publications that look quite legitimate and tend to appear to be of value to the community. Common themes have been volunteering, child safety, drug awareness, occupational health and safety, and emergency services such as fire and police. However, it becomes apparent that these businesses have bought advertising space in a publication that either does not exist or has very limited circulation; that is, they get the only copy with their ad in it and, often, the advertisements were never authorised.

Something like 30 different publications have been identified. In their sales pitch, these scammers claim the publication is affiliated with a particular community group or well-known organisation—for example, Police Legacy. They contact businesses and advise that the publication has already been printed and that it is ready to be sent to them when, in fact, the business never agreed to place the advertisement in the publication in the first place.

The invoices received by South Australian businesses have varied from between $200 to $500, with about $400 being the most common amount. They try to cover themselves by inserting the words, 'This is a solicitation, not an invoice for a debt incurred by you.' However, the invoice contains the same information one would expect on any legitimate invoice.

Some South Australian businesses have reported that they have been harassed by the false billers in an attempt to get them to pay for the invoices. Some also claim that they have been threatened with legal action. That sort of conduct breaches various sections of the Fair Trading Act. I am advised that one in five businesses appears to have paid the invoices that have been sent to them without realising they were being tricked. Several South Australian businesses have parted with in excess of $3,000 each, without realising they were paying for ads that they had not authorised. Possibly, hundreds of thousands of dollars (if not millions of dollars) worth of invoices have been sent to South Australian businesses for advertising that was not authorised by the business or was authorised based on misrepresentations made to the business.

Because this is a national problem, I have alerted the federal authorities to the possible use of false ABNs for investigation, and I have also written to my interstate counterparts urging them to work towards a national approach to the problem of false billing, as the majority of these so-called publishing firms are located in the Eastern States. In the meantime, it is important for businesses here in South Australia to keep meticulous records of any advertising or marketing that is authorised by them. If they suspect that they had been targeted by this type of fraud, they should contact Consumer Affairs immediately.

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