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Fraud in promotions 'could rise in face of credit crunch'
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The potential for fraud within sales promotions over the next six months could rise as promoters try to cut costs in the face of a downturn, according to a leading industry compliance specialist.

Neil Barnes, managing director of Enable (Marketing and Promotions), has issued a warning that the current economic climate could undermine the industry unless those running sales promotions continue to be vigilant about rules and regulations.

Barnes, who has 15 years of experience providing "behind the scenes" services for local and international promotions for brands, says getting it wrong could put promoters at risk of heavy fines or mean that prizes are awarded to fraudulent claimants.

He said: "In the next six months people will need to promote their brands and there is always a temptation to rush out a promotion quickly or turn to cheaper suppliers or methods to cut costs. This is perfectly acceptable, as long as security and legalities are not compromised.

"We have to remember that those entering promotions are also suffering in the recession and that is likely to mean that people who are normally honest could be tempted to commit fraud.

"Having a sales promotion that is not legally watertight and thoroughly thought through is rather like leaving a car window open with a laptop on the back seat - it will be just too tempting for those who see it as an easy way to make money."

Barnes said that a growing trend to use SMS and email entries was also leaving promotions open to security breaches.

He added: "Those who habitually enter promotions might exploit loopholes in text messaging and email that do not exist in postal or more traditional entry means. So, promoters could be particularly vulnerable to fraudsters making multiple entries and taking an unfair advantage over genuine competition entrants.

"It is in the interest of brands to ensure that the people winning their promotions are genuine customers and potential customers and not just gold-diggers who will be on to the next brand's promotion the next day chasing more prizes."

Enable (Marketing & Promotions) Ltd, based near Bristol , advises and assists promoters on combating fraud and cheating. It ensures the fair and legally compliant running of local and international promotions of all sizes by auditing all procedures, overseeing print and production, the fair and random allocation of prizes, the independent judging of competitions, and the provision of unique codes.

September 17, 2008
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