Tag Archives: fraud

Faster than the speed of consent

A few weeks ago, CBC Montreal came out with a story about a local telemarketing company that was being accused of defrauding small businesses by selling them things they didn’t want by phone. In fact, criminal charges were laid last year against the company¬†and others, accusing them of telemarketing fraud.

The CBC story was that despite these charges, the company, called Express Transaction Services Inc., continues to operate (though it told CBC that it would soon shut down for financial reasons). It included some testimonials from people who said the company sent them dramatically overpriced office supplies they never ordered. None of this has yet been proven in court.

What’s interesting here is what happened next. ETS responded by setting up a blog and posting recordings and transcripts of the phone calls between ETS and these supposed clients.

From the perspective of ETS, these recordings prove that the items were indeed ordered by these businesses. But of course they show nothing of the sort. Instead, they read like a textbook for deceptive telemarketing. The calls originate from ETS and ask about shipping addresses, referring to previous conversations in which the goods were supposedly ordered. The operator then tells the client the goods will be shipped, and if the response isn’t angry outrage, they consider the deal closed.

I posted a comment on the first post asking about these conversations the calls refer to at the beginning, in which the clients supposedly talked to someone else at ETS (different people, all with no last name) and made orders for these overpriced goods. Weeks later, no response.

This method of pushy telemarketing – calling up businesses and asking some secretary boring questions about shipping addresses and pretending “okay” means they’ve ordered a good they never asked for – has been around for years. What’s astonishing is that ETS seems to actually think that these recordings will convince the public that they’re the victims here, that the clients actually requested the goods they were delivered, and that their telemarketing practices aren’t deceptive or fraudulent.

If you believe that, I have some way overpriced cash register printer paper to sell you.

Student union money is easily embezzled

The Concordia Student Union has a budget of about a million dollars a year (actually, it’s probably more than that now, but within an order of magnitude). That’s a lot of money, and it’s managed by amateurs who swoop in without any experience. So it’s unsurprising that eight years ago, the union discovered that one of its executives made off with almost $200,000 over a year and a half by writing cheques to herself and hiding the evidence from the bookkeeper.

When the executive discovered what happened (at first they thought it was more like $30,000), it was reported to the council of representatives in a super-secret meeting. The press release came out a week later. It took four years before she was finally convicted, though the union still hasn’t recovered all the money.

This month, history appears to be repeating itself, and the CSU has apparently discovered another “financial irregularity” about “misappropriation of funds” which was presented to a super-secret meeting. No dollar amount is given, but one would assume we’re not talking about a few extra beers in the expense account. No one is named, of course, but it would have to be someone with access to the money, either an executive or an accountant.

For someone to do this at the CSU takes balls (and “creative accounting” skills) the likes of which I have never seen. The union put rigorous financial controls in place after the first fraud, including new financial policies and the hiring of a financial controller. It will be interesting to see how these safeguards were foiled this time.

Meanwhile, a bit further west down de Maisonneuve Blvd., the Dawson Student Union has a financial scandal of its own. It seems one of its executives racked up $29,000 in expenses on her executive credit card (well, I assume it’s a her – if a guy is spending that much on clothes and jewellry, there’s bigger problems afoot).

Whose bright idea was it to give apparently limitless credit cards to 18-year-old CEGEP students? I mean seriously, did nobody consider the rather obvious possibility that this might happen?

What the CSU and DSU have in common, despite the fact that stealing from them is like taking candy from a baby (a baby with a trailer full of candy), is that both were accredited as official representatives of their students, meaning the schools’ administrations have certain legal obligations involving student fees, and can’t interfere in their affairs.

I’m not suggesting differently here, but this is clearly a systemic problem. CEGEP and university students can’t be trusted with huge bank accounts. Rigorous financial controls need to be put in place, and those controls need to be verified on a regular basis by an independent third party.

Perhaps the government should step in here. The same law that says universities must hand over student fees to accredited student unions should also require certain financial control measures be put in place, and there should be regular inspections by the government to ensure that they are respected. Miss your audit by a day and you get a visit from a government agent. Even if you don’t, you still get a visit. Otherwise things like this will just keep happening.

And all of this is completely separate from the misappropriation of funds by student clubs and smaller associations. It was rampant in my time and I doubt it’s gotten much better.