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Website scam: Court imposes $4,120 fines and costs

Website scam: Auckland District Court imposes $4,120 fines and costs
Media Release 2000/66

The Auckland District Court today fined Neil Jeffrey Crozier and Suzie Dianna Crowe a total of $3,600, plus $520 costs, for breaching the Fair Trading Act by making false claims that businesses needed the services of the website and e-mail addresses created by Mr Crozier and Ms Crowe.

Commission Chair John Belgrave said that Mr Crozier and Ms Crowe had threatened to sell the website and e-mail addresses of 11 cleaning companies to rival firms or an Australian group, unless the businesses paid $A5,000 each.

Mr Crozier and Ms Crowe registered as Internet domain name, the names of 11 cleaning companies with substantial advertisements in the Auckland Yellow Pages telephone directory. They created e-mail addresses using the companies’ names and also a website that could be accessed by searching under those names.

The 11 companies were not consulted and had no knowledge of their names being registered, nor of the creation of the website and e-mail addresses.

Mr Crozier and Ms Crowe sent each company a series of letters.

At first they offered to consider tenders from the companies to buy back their own domain names and e-mail address. They then claimed that the website was receiving 45 to 72 hits a day and an Australian group had offered to buy the entire call centre.

In January this year they claimed that the web site had returned, unanswered, more than 150 e-mails, that most visitors to the website wanted to buy services from the companies and there had been 16 inquiries about buying franchises. They went on to state that they were simply refusing to respond to visitors inquires and those visitors were becoming irate with the cleaning companies.

Mr Crozier and Ms Crowe then offered to sell to each company its own domain name and e-mail addresses for $A5,000. Registering the names had cost Mr Crozier and Ms Crowe $NZ999.

When interviewed by Commission investigators, Mr Crozier and Ms Crowe admitted that their claims were false—there had been no hits on the website, no offer from an Australian group and no e-mails. In Court today they admitted breaching the Act.

Mr Belgrave said that, for some time now, the Commission’s view has been that the Act applies to websites and e-mail in the same ways as it does to other media.

"The Court’s decision today reinforces the point that the Act applies to all business, including business conducted electronically."

Judge Lockhart QC stated that in setting the fines he had taken into account the defendants modest means to pay a penalty.

Media contact: Fair Trading Manager Rachel Leamy

Phone work (04) 498 0908, cellphone 025 208 0841

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

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