According to the Crimes Act 1961 ‘theft’, or ‘stealing’, is the act of, “dishonesty and without claim of right, taking any property with intent to deprive any owner permanently of that property or of any interest in that property.
It is a crime, whether it be a lollipop or a Ferrari, if you take it and haven’t bought it. It’s a crime. Right? … well, not always.
We had a client come to us a few years ago who owned a car dealership in the Waikato. He had sold a $10,000 car on a time-payment plan; He had the customer sign a direct debt form, provide ID, and then sign a contract. No payment was made at any time – in fact the account used to set up the Direct Debit was closed the day after the car deal was done.
The client reported the car as stolen to the police. While taking the report the officer asked, “So did he break into the yard or steal the keys?”
Our client replied, “No, I gave him the keys.”
The officer asked, “Did he threaten or intimidate you to give him the keys?“
“No, he was a lovely guy to deal with,” was the reply.
The officer then went on to say that the customer had not stolen the car, he had simply failed to pay for it – the officer suggested getting a debt collection company onto it or lodging a claim with the Disputes Tribunal.
According to a very elderly chap I met, the local constable used to go around and give a stern word to anyone with a habit of running up overdue accounts. Alas, that is no longer the case with the police force stretched in every direction just dealing with serious and violent crime.
You see, a less-cunning average thief will smash through shop doors and pilfer items, clearly committing a premeditated act with a proven lack of intention to pay for the items – hence the ‘smashing in at night-time’, not the ‘walking in during opening hours’.
If they are caught, they may receive two years in a very uncomfortable motel. Or if it’s their first offence, maybe a slap on the wrist with a moist bus ticket. However, your more sophisticated ‘alleged intentional non-payer’ will understand how to achieve the same goal with very different consequences should they get caught.
Many will say that if someone orders something, finances something, or borrows money with no intention of ever paying, that is committing fraud. But this requires proving one sometimes very hard to prove thing: intent.
Occasionally we get lucky when investigating fraud when employees have been involved with an outside co-conspirator and we find an email or text message between them that proves intent to defraud.
But often the ‘alleged intentional non-payer’ will have cover stories that can make the non-payment seem like a bout of unfortunate luck. This then puts it into the realm of a defaulting payer situation, not criminal fraud.
I have seen these, in my opinion, ‘scams’, run on businesses for vast sums of money. They exploit weaknesses in the credit management systems and lack of verification data for ascertaining who is a real customer, client or borrower and who is just a very clever thief.
The systems designed to protect the owners of genuinely distressed or collapsed businesses, such as trusts, limited liability, debt holidays, ‘no asset’ procedures, The Crimes act 1961 and The Privacy Act 2020 can unfortunately protect those who wish to misuse them to cover up dastardly deeds.
There are tools to help with detecting and deterring this kind of behaviour but having a good customer onboarding system and training is essential.
Remember credit is a privilege, not a right.
Just a thought.
Related: Not always better the devil you know