$20,000 fine for 55 breaches of Fair Trading Act
Issued 11 July 2002-03 / 008
Publisher fined $20,000 for 55 breaches of Fair Trading Act
Anthony John Hendon was fined $20,000 in the North Shore District Court today after pleading guilty to 55 breaches of the Fair Trading Act relating to his businesses, Peach Holdings Limited, Hilltop Printing Limited and Mainland Media Group Limited.
A Commerce Commission investigation revealed sales agents, working for Hendon on commission, made false representations in both telephone calls and documentation to businesses that they had agreed to advertise in magazines published by Hendon. The businesses were then invoiced on the basis of these misleading representations.
In sentencing, Judge Buckton told Hendon, "If you come back before me in relation to any further serious fraudulent offending, I will send you to prison."
Between June 1999 and August 2001, Hendon's agents "cold called" businesses and professional firms, seeking their agreement to advertise in the magazines they were promoting. The Commission received complaints regarding the agents sales techniques where it was implied that the prospective client had previously agreed to advertise in the magazine.
In these phone calls, the sales agents advised prospective clients they would be sending through a document called a "Fax Proof" featuring their advertisement, which they were to sign and fax back as approval. The advertisements were often a photocopy of an advertisement previously placed by the client in another publication. Deborah Battell, Director of Fair Trading at the Commerce Commission said Hendon's conduct was clearly unfair to competitors, and threatened public confidence in publishers of legitimate small magazines, and in telemarketing. She said it was particularly unscrupulous that the magazines were purporting to service the voluntary sector and safety issues.
"The number of businesses targeted in this way is an area of concern. The Commerce Commission has had over 300 complaints in the last year about the publishing industry in general - not only relating to agreements to advertise but also false billing. We were fortunate in this case that so many businesses came forward with complaints about Hendon's activities and that so many took the time to make formal statements," Ms Battell added.
"Businesses of all sizes need to be very wary and ensure they have comprehensive systems for ordering goods and services and for authorising payments."
Background Under the Fair Trading Act, the maximum penalty that can be imposed on an individual is $30,000.
Anthony Hendon has previously come to the attention of the Commission. In the Commission's successful prosecution in 1998 against Zennith Publishing Limited, Ashley Rhodes and other companies operated by Rhodes for false invoicing, evidence was presented naming Anthony Hendon as one of Ashley Rhodes' salespeople. The fines imposed on Rhodes and his companies totalled $130,000.
Magazines published by Hendon's companies and promoted by sales agents: * On the Streets * The Local Services Diary * Road Safe Journal * The Local Authority Guide * Addiction * Think Safety * Crisis * Senior Style * NZ Safety Awareness Journal * Regional Farming News * Task Force * Trades & Services Manual