13 May 2009

Companies fall victim to $2m ad scam

7:52 pm on 13 May 2009

Police estimate about 1000 companies in New Zealand have been fleeced of more than $2 million by cold-call companies selling advertising that is never published.

Police believe six people are involved in the operation which offers advertising in magazines that have similar titles to authentic brands.

The group sells advertising, using a magazine title which is similar to an authentic publication. Clients who agree to the advertising are then sent an invoice, despite the adverts never being published.

Detective Ash Johnstone, of Wellington, says the group uses magazine names such as "The New Zealand Parent Reference Magazine" and "The Community Safety Guide".

One business targetted in the scam was Rotorua-based Mini-Skips, which received an invoice for $800.

A director of the company says it did not authorised a payment to the so-called advertising company because it could not produce proof of the advert being run.

Consumer New Zealand says if businesses are contacted about advertising for magazines they should take down the agency's details which they are able to check with the Magazine Publishers Association.