Businessman Has Solution to Large Scale Fraud

Local Businessman Has Solution to Large Scale Fraud

Kiwi businessman and entrepreneur Mike Pero says he is not surprised by the losses Kiwis have incurred over the past six months, and more particularly over the past three years, through large-scale fraud.

KPMG’s latest large-scale fraud survey shows the accumulated losses for Kiwis over the past six months has reached a staggering $72million and KPMG predicts this is just the tip of the iceberg.

Mike Pero says he has a simple solution to combat this type of fraud.

“My escrow company, SafeKiwi, could save Kiwis many millions of dollars a year by acting as the independent stakeholder in financial transactions,” he says.

“SafeKiwi (New Zealand) Limited has operated for about a year now and uses Public Trust as its Custodian, who in turn operates with a Government guarantee of independence.”

In 2008, the Ministry of Consumer Affairs reported that in the 12 months prior, Kiwis had been swindled out of almost half a billion dollars. Mike Pero says the recent survey findings by KPMG, coupled with the half a billion dollars reported by the Ministry of Consumer Affairs, could see the real figure since 2007 in excess of $1billion.

“Admittedly a large slice of the losses was through fraud, deceit and bad investment decisions, but there is still likely to be a huge amount lost through careless business operators and unreliable customers,” he says. “It seems to me, sitting in the financial services industry, that even with the best intent Kiwis lose money either as a buyer or a seller of goods or services.”

He says the $72 million does not include the many thousands of dollars the average Kiwi has been swindled out of by suppliers and buyers in everyday life.

“These are innocent people losing their hard earned family savings because of a professional person they thought they could trust.”

Mike Pero’s business, SafeKiwi, is an online escrow and transaction service that allows people to place money with a trusted independent party. The money is only released once the goods or services are delivered. In the event of non-delivery or failure to perform, the buyer can hold back payment and enter a dispute. Mike Pero says there’s a big upside for the supplier or provider in knowing the buyer or customer has the money and their payment is assured.

“It’s still early days for Kiwis understanding a new concept like ‘escrow’, which leads to a safer way of doing business. But every day more Kiwis are realising the best place for their pre-payment, deposit or bond is neutral territory,” he says.

He says SafeKiwi can work for New Zealanders in everyday situations.

“Imagine a customer is buying a kitchen where payment is often made upfront. The cost to protect $5,000 is $49.50 and SafeKiwi also provides a template for a supply and payment contract between the customer and the supplier. Escrow can and has been used for the simplest transactions, like buying a mountain bike, to bigger trades like yachts and commercial buildings”

Mike Pero believes more and more organisations will move towards customer and supplier protection, in order to protect both their customers and themselves.

“When a supplier offers escrow upfront it says a lot – it says I have integrity, I will deliver and I’ll put my money where my mouth is.”

ENDS

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