The dangers of gift cards

Color Gift CardsRecently, LMI have been involved in a number of claims involving theft by trickery and what we have found is that people have skimmed credit cards and then used them to purchase gift cards, which at the end leaves the retailer of those gift cards with the loss when the bank has reversed the transaction and the thief has the equivalent of cash in the form of gift cards. Consumers are also being caught with gift cards in a number of different ways.

One of the things that I’ve felt was extremely unfair leading up to Christmas is that the Dick Smith stores were encouraging consumers to purchase gift cards and then went into liquidation shortly thereafter leaving all the consumers with the unused proportion of the gift card as an unsecured creditor with little to no hope of them getting anything back. Dick Smith are not the only ones, there are a number of examples in recent times of day spas and beauty salons selling these gift vouchers, taking the cash and then shutting doors. A member of staff recently purchased a voucher as a mother’s day gift where the shop has now closed up. However, a new store has now opened in the same place, with the same staff, same uniforms, however a different business name therefore leaving the vouchers unusable and the store turns around to say “that isn’t them, it’s a different business”.

Another member of our team, purchased a substantial gift card for their daughter before Christmas. The daughter’s purse was stolen and so the staff member went to the retail store, in this case David Jones, where they showed proof of purchase of the gift card and asked that it be stopped and a fresh card reissued. The retailer refused to do this saying that the loss was at the risk of the consumer.

A more common issue is the fact that most gift cards have an expiry date which is said to be there to protect the consumer, but of course, the retailer has a win every time the consumer fails to use the gift card within the stipulated period. Therefore, anyone with a busy life is likely to get caught out with this issue.

Having said this, I will say that my wife was given a gift card for Village Cinemas and when she realised it was about to expire, she rang up the company and they were happy to extend it for another month to be used at no extra cost, which was both surprising and pleasing. I congratulate them on their approach which enhances a good customer experience, in contrast to the earlier examples cited.

I will conclude with three points.

  • I think that the Government should legislate that any monies received by a retailer for the sale of gift cards, should be immediately placed into a trust account so that the consumer knows the funds will be available when called upon.
  • The whole concept of the gift card, while originally had good intentions, particularly if you are looking to purchase a gift for someone who is hard to pick for, I really think the risks of the cards far outweighs the benefits. It may be better to leave a note in the card saying “Please spend $___” and then reimbursing up to the agreed amount for the individual when they find something they wish to buy. This is not as classy; however, it does offer greater protection.
  • If you do purchase a gift card to minimise your risk, choose a store that is long standing and a reputable brand, however in the David Jones example it does demonstrate you are never fully guaranteed your purchase from particular circumstances.
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At last, some good news

The words Good News in a colorful burst of stars or fireworks toLast week I reported on a couple of attacks on LMI Group. One physically with the violent robbery and the second, a cyber attack.

While we are in the process of enhancing the video footage of our own robbery and have identified the perpetrators vehicle and are now working towards the number plate, we are pleased to report that the footage we had of a robbery to our neighbours not long before us, was sufficient to identify the vehicle involved in their robbery and this has led to the arrest of the alleged thief. We are yet to hear whether the property stolen has been recovered but hopefully we have got at least one off the street.

The loss adjuster involved in our robbery attended site Friday last week, appointed by our insurer, QBE. Delaying his attendance was nothing to do with either our insurer or his firm but rather the fact that Steven and I had been out of town for over a week and he attended our first day back. The whole process has been quite painless and the vast majority of the claim has been agreed. It does pay to keep in mind the claims service you receive from your Insurer when purchasing the insurance. As I have said many times, it certainly is not just about price, it is also the level of coverage and the speed and fairness of the claims service.

As both Steven and I have so much of our own personal property at work, being both avid collectors of Insurance, Fire Brigade and other memorabilia, we have both our names included in the definition of the named Insured, therefore avoiding any sub-limit for employees or directors property.

The lesson from all of this is that as the economy toughens, crime does increase and it is incumbent upon us all to protect our own property and keep an eye on our neighbours and local community by working together. This way we have a much greater chance of staying safe and keeping the baddies at bay.

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It will never happen to me – again

Scam AlertThe first business day after our robbery, which I reported on last week, we dodged a very near bullet with an email scam attack.

The circumstances were that I was out of the office travelling to film an episode for our YouTube channel when our financial controller received an email from an email account set with the name ‘Allan Manning’, reportedly me, asking if our they had time to process an urgent electronic transfer.

The staff member was stressed because her office had been ransacked from the robbery just days prior, another staff member had emailed to resign and another in the department was on leave. All of this on top of business as usual with urgent requests for invoices to be raised etc. The controller did not carefully read the email but thought that the recipient of the funds was to be a lawyer and that the email was from me.

In hind sight there were three things that were wrong. First, the Australian resident had LLC after their name which stands for Limited Liability Corporation, a UK term meaning the same as Pty Ltd in Australia. The email, while saying it was from Allan Manning, was actually from a gmail account and it did not have my usual footer. Having said this, the wording could easily have been from me as it was a polite business style.

The staff member wrote back and said ‘yes’ they could do that and then an email came back giving details of where the money was to be sent and I would bring in the invoice when I returned. Believing it to be genuine, the controller processed the payment. Fortunately, I returned from the trip just a short while later and in passing the member mentioned that she had processed the payment that I had requested. I then said ‘what payment?’ followed by her ‘Well you have written me two emails about it’. I then explained that I had been out and what I had been doing, I had not sent any emails at any time during the day. We then went to her computer to immediately discover it was fraudulent and were able with the help of both our bank and the receiving bank to stop the payment.

I can say without reservation that the staff member would not have been caught but for the stressful conditions we were all working under at the time. The person is well educated and dedicated, with a very high IQ. What this shows is that anyone can be caught and no matter how busy you are, you need to be on your ‘A game’ when it comes to cyber security.

Still feeling ill over the near miss and the effect it would have had on the business, the staff member was in the bank and in the time that they were there 5 people came in distressed that they had been scammed by either email or through Linked In, Facebook or text messages. Five people in under forty minutes at just one branch of one bank is a terrifying statistic.

The human mind sees what it expects to see.

For example, if you read the next sentence:

 

spring time

in the

the park

 

Most people will read this as ‘spring time in the park’ they completely miss the second ‘the’. The mind does not pick up every single word, but only picks up what it expects to see. So when the email came in from Allan Manning, they did not pick up the wrong suffix or usual footer.

Further, this is not a usual request,  it is only because we are doing some renovations in the building that they thought it was legitimate. Normally they would ring me to check it was legitimate and get the second check before authorising payment.

During this whole process, I found that our own bank, the Commonwealth Bank were a bit ordinary whereas the Cranbourne Branch of Westpac were fantastic as were Victoria Police.

My final comment is that we can all have the very best procedures in place but the biggest risk is people risk when it comes to cyber security. I’m just so thankful that we dodged a second bullet only two days apart.

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Keeping yourself safe

Stay Safe Red Rubber Stamp On WhiteAs I reported yesterday, LMI Group was the subject of a violent robbery on Saturday 9th July 2016.

The police asked if we had anyone unusual come to our building in the last week or so before the robbery and our receptionist recalled that someone claiming to be from Google wanted to do a 360 walk through of our office. She and two other staff who went to her aid when he would not take the initial no as an answer, all explained that it was a security breach and we would not allow it.

Since the robbery, we have contacted Google to see if the person is legitimate and they advised that they do have people out doing this sort of thing but cannot advise where they operate from, whether they have identification or the type of buildings they are to do.

While I can see the advantage of this in museums and shopping centres, I do not see any advantage in having this information publicly available in private businesses other than it being a great tool for dishonest acts of all types, whether this be burglary, armed hold ups, terrorism, kidnap or arson.
From a security point of view, I would not allow anyone to come through my building and I would strongly urge that Google provide some form of identification to these contractors to ensure that they are legitimate.

If anyone else comes to our building, I have instructed our staff to take a photocopy of their identification.

I urge all my readers, and in the case of insurance brokers, to discuss this security issue with your Insureds. It is one thing to do a walk through with a camera or video camera to record your premises for Risk Management and Insurance purposes, but it is another to make it publicly available.

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Drone Insurance Question

PILSEN CZECH REPUBLIC - FEBRUARY 18, 2016: Drone quadrocopter DjHi Allan,

I have been doing a little investigation re existing Liability (Commercial Business) on use of UAV’s / Drones for any potential vicarious risks my existing client may have to their use by their contractors ( R/Estate firm = images and videos for sales campaigns etc.)

Realised early that most of the Liability wordings do not “ know “ about them , therefore facing issues of potential exclusions relative to “ air craft “ ?

Just like earlier days of Cyber this is an emerging risk

Insurers are and have drafted an endorsement which gives UAV’s / Drones a definition and from a vicarious issue my clients are now in a clearer position.

My query is – with your experience where do you sight the “ risks” ahead relative not only to direct users , but for those who may get dragged into related actions from their Contractors who use the Drone?

Oh and what if the CEO decides he’d like to play with one at home – how will the risk associated with private use impact current HH Policy wordings ??

I’ve been alerted to CASA updating their requirements for their licensing or use –

Drones weighing more than 2kg will need a more specific aviation cover on the unit and its associated Liabilities.

Here is the link for more information :-

https://www.casa.gov.au/aircraft/standard-page/operating-remotely-piloted-aircraft-safely

Cheers

PS- Hope you and family are all well

Gary [surname and email provided]

 

Hi Gary,

Thanks for your note about Drones. I’ve done a few pieces on this and you would be surprised just how many businesses are using drones. The list includes farmers, engineers, the mining industry, construction industry as well as real estate as you say.

Taking the easy bit first, if someone is using a smaller drone such as a DJI Phantom or the like, which is really just an expensive toy, then I believe it would fall under the definition of a model aircraft which is a write back to the aviation exclusion found in home and contents policies. Again, it is important for the Insured and/or broker to check the home policy to make sure that the exclusion would not apply for them using a drone purely for recreational/fun purposes. I doubt that the insurer would take a positive view if the Insured was using it inappropriately by, say, breaching someone elses privacy as a deliberate act. In a commercial situation, when the unmanned aerial vehicle (“UAV”) is being used for commercial purposes, it is no longer regarded as a model aircraft and therefore my recommendation is to obtain an aviation policy. For my own business, we do have a drone which we use regularly and I have elected to insure that through QBE Aviation and I have found Mr Simon Hooper, based in Melbourne, to be very helpful and keen to ensure that his Insureds are protected.

The cost of this cover has come down considerably from the first year of our owning the drone/UAV. Initially, I found it cost prohibitive and I decided to carry the risk myself, whilst taking certain risk management precautions to ensure that the risk to the business and I was minimal. While I still take those same risk management measures, having the added protection of insurance is a great comfort to me.

There may well be other products out in the market, but Simon is my go to man when it comes to this class of insurance and am sure he will look after you.
Finally, you are to be congratulated for addressing this very real issue for your clients.

Regards

Allan

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It will never happen to me – but it did

LMI Group have been in the Melbourne office since May 2000. During that time, we have slowly improved our security as we’re always worried about holding commercially sensitive information for our clients and housing our services and so, we have ensured that our windows that did not face the main street were all barred, we have a back to base alarm system and 10 cameras. We attempted to dead lock our front door, however the current building code of Australia does not allow this as it has to always remain as a fire exit.

Our own LMI Group front door which was used as the entry point for the thief

Our own LMI Group front door which was used as the entry point for the thief

 

On Saturday evening, 9th July 2016 at 10.30pm while there was a great deal of traffic going down the street, a large piece of concrete was thrown through the front door and a burglar instantly entered by putting his hand through the hole he made through the laminated glass and pulling the handle. Despite the alarm going off, he remained in the building for 15 minutes. It took that long for the back to base alarm company to telephone me, but fortunately I live close by and fearing that it was a robbery and not a false alarm because of all the others that have been occurring around us, I rushed over, getting there approximately 15 minutes from when the thief first entered.

On my way over, I learnt from our alarm company that the rear access door had been activated and so I headed for there. Meanwhile, the thief was preparing a getaway through the rear door and had opened the door just to test that it did open. This meant that someone had left out of our building Friday afternoon without deadlocking it against company policy.

I also contacted the police and advised them a robbery was underway and I was about to arrive. Against their sound advice, I entered the building through the rear door screaming and shouting with the police on the phone. Unbeknownst to me, the thief had picked up a dagger that had only been put on display the very day before in our office. Fortunately, he dropped most things other than the dagger and whatever he had in his pockets as he ran for his life out of the building, right across the street, fortunately or unfortunately depending on what mood I’m in, he avoided getting hit by all the cars on the busy street too. He ran past his own vehicle, hid in a lane way to compose himself and then calmly walked back to his car and drove off just as the police arrived.

 

The thief had targeted in the first instance laptops and our petty cash tin. He then went back around a second time, I learnt this from watching the CCTV footage the following day, to collect smaller items such as pens that my son and I had collected over the years, often given to me as a thank you from a particularly happy client or for speaking at a conference or the like.

With the robberies that had occurred around us, I had a false sense of security, although there is always a doubt in your mind, that we were secure because of the security precautions we had taken. When it was tested we did find a number of things. First, the neighbouring houses behind us did not react to the alarms. There was a function only 4 doors down the road at a premises that was recently broken into themselves and they did not hear the alarm nor did their security guard out the front. The fact that there was a security camera clearly visible from the footpath in front of our building and the traffic on a busy road still did not deter the thief.

On the positive side, no data was lost, no one was injured, although my feet did get some glass in them from walking over the broken glass door, and we were fully insured.

We are now working with our security company, locksmith and a company that supplies 3M glass for anti-shatter glass film suppliers to beef up our security further and will fast track the upgrading of our front fence which we already have council approval to do.

I do not believe I am becoming more paranoid but there certainly is an increase in the level of crime all around Australia with car jackings, burglaries etc and I would urge everyone to have a fresh look at the security on your own premises, whether it is your home or business, and to double check your insurance program.

If you are unfortunate enough to have a burglary, the advice I would give is to run a virus check on all computers left behind and make sure there is no physical device such as a key logger that has been inserted into any of the machines. Another thing to check is if any house, business or car keys have been stolen.

I would finally like to sincerely thank the police officers who attended on the night. It is a dangerous and difficult job they undertake on behalf of society and we all owe them a great deal of thanks. The follow up police, including the detectives have all been very proactive and acted with compassion and a genuine desire to assist and catch the criminal involved. I know they get their fair share of criticism but from where I sit, none is deserved on the way they responded and treated my staff and I since. From their side, I think the police are pleased that we had so much footage and done so many enquiries, assisting our neighbours before our own attack and following, including checking all the local rubbish bins, gardens and sending off photographs of the more distinctive items to the likes of cash converters who we have done claims for in the past and have a relationship through their very helpful insurance broker.

The police were also impressed that all the computers and laptops we have recorded the serial numbers and have them clearly marked for identification as well as data encryption.

One thing that I have been meaning to write about before this event, but which has brought home to me, is when comparing our CCTV footage to our neighbours. Often people do not record on their system in the best and highest quality as they are trying to keep the surveillance for as long as they can. A poor quality video recording that does not pick up the number plate of cars etc is valueless. Hardware storage is cheap and if you’re going to the trouble of putting in cameras, record at the highest possible level and keep your back up disks off site.

The other thing that we did that assisted us was that because of the robberies around us, it prompted my son to walk around and take some photographs of the more valuable items in the office. Even then, it was not until I reviewed the video tape that I realised the dagger had been stolen and only knew this when I saw him with it in the thief’s’ hand.

The event has also reinforced to all our claims team just how it feels to be a victim rather than going out and looking at claims and there is certainly an emotional stress that none of us should forget to the victims of loss or damage, particularly as a result of a violent robbery or fire.

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Comparisons now available at PolicyComparison

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Does your home policy cover your landscaping?

Garden stone path with grass growing up between the stonesI was out assisting a bush fire victim today and was surprised to see that with the particular policy they were covered under, despite it being the top of the range policy for this insurer, had no cover at all for ‘Landscaping, trees, shrubs and plants’ of any description.

Upon looking on PolicyComparison.com we found that with even some of the most basic policies with other insurers there is cover for landscaping, trees and shrubs and the like, ranging from $1,500 – $20,000. Some policies do not provide cover, this surprised me as I am used to seeing this cover for landscaping including plants in business packs and certainly in the ones I draft.

In the case I was assisting with today, this was something that was very disappointing for my clients as they are keen gardeners and what the fire didn’t get initially, the builders have destroyed in the reconstruction process.

If you are in any doubt about your home and contents policy, please discuss this with your insurance broker, who using tools such as Policycomparison.com can quickly advise you on the cover available under the various insurers.

The cover on this one aspect can vary enormously, with monetary limits, distance restrictions from the home as well as other exclusions including embargo periods from the inception date of the policy.

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Insuring a mobile site hut

site hutI had a question asked of me today regarding insuring a mobile site hut for a builder.

While many private motor vehicle policies provide a small sub-limit for a trailer while attached to the towing vehicle and liability insurance, there is no such cover for owned trailers under a Commercial Motor insurance policy.

In this case, as the unit is on wheels and is used for commercial purposes the best way to insure it is as a trailer. A full description on the unit should be provided to the underwriter so that they can insure it correctly.

As the unit is on wheels it is not appropriate to insure the unit under a marine policy.

In my discussions with the broker we also touched on security measures to reduce the likelihood of theft.

If any subscribers are interested in the level of coverage provided under private motor policies you can check the whole market in PolicyComparison.com

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Will regulation stifle the development of driver-less cars following first fatal accident?

The words Autonomous Vehicles on an automobile gauge with the neOver the weekend I heard of the sad death of Joshua Brown who was in a car operating in autopilot mode. As I understand it, a semi trailer turned across the path of the Tesla Model S car and the on-board anti-collision computer system did not pick up the light coloured truck against a light sky. Whether Mr Brown saw the truck coming we will never know.

United States Transportation Department officials have started an investigation into the cause and many people, including those in the insurance industry and government regulators will be watching for the results with interest.

Ironically, Mr Brown had filmed an incident earlier where the car had prevented a serious accident.

My concern in our Nanny State world is that some interests will attempt to use this tragic event to urge regulators to put up barriers to the development or use of the technology.

Can you image if the governments of the world had stopped or even held back the early development of aircraft technology, how much economic and political benefit would have been lost, not to mention the pleasure of tourism that the ongoing development of flight has created. The early developments in flight, of course allowed the development of space flights with huge scientific and economic benefits. Affordable space tourism is just around the corner.

I have been watching the development of autonomous vehicles with great interest for many years now.  I see huge benefits in so many ways. The transport industry is the most dangerous industry to work in. More dangerous than mining and construction put together. To read the latest on this subject visit https://www.finder.com.au/most-dangerous-jobs-australia

There will be lessons learned from this accident and I am certain that the technology will continue to improve and over time the appalling death toll and the number of serious injuries will be reduced by this technology. Hopefully the regulators will appreciate this and not throw the baby out with the bath water.

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