Media release
9 November 2012

New Zealand computer stores caught selling pirated software

Unsecure supply chains creating emerging cybercrime threat

A recent investigation undertaken by Microsoft New Zealand has identified six Auckland computer stores selling pirated software to consumers.

Microsoft’s investigators bought computers loaded with unlicensed Microsoft software at:
• IT Serve International
• Comtech International
• D&J IT Solutions
• Computer Xpress
• R.A.Y Tech
• Powernet Computers.

All six stores admitted breaching Microsoft’s copyright, and settlements were reached with each company.

"It tends to be the smaller, local computer stores that are the ones selling unauthorised software in New Zealand," says Clayton Noble, Legal Counsel for Microsoft.

"We don't put these people out of business, but it's important that we stop them selling the unauthorised software, which can often be full of malware that is capable of compromising computer security and even facilitating identity theft. Some strains of counterfeit software products contain hidden key-logging software that allows criminals to steal passwords, bank account details and other personal information."

Some pirated software is also unable to receive and install important security updates, which increases exposure to viruses.

The six stores paid a combined $34,000 in settlements for copyright infringement.

According to a recent Business Software Alliance (BSA) report, 22 percent of New Zealand software is unauthorised, the fourth lowest piracy rate in the world.

"New Zealand's strong respect for intellectual property, its robust legal system and general awareness of the benefits of using genuine, licensed software mean that New Zealand has one of the lowest software piracy rates in the world," says Noble.

“But we’ve still got a long way to go. More than 1 in 5 copies of software in New Zealand are pirated. It would be great to see New Zealand leading the world in this area.”

Last month Microsoft's Digital Crimes Unit exposed an emerging tactic of cybercriminals – infiltrating unsecured supply chains to embed malware before a new computer even gets to the retail store.

"Unsecure supply chains are one of the key ways cybercriminals are getting malware to unsuspecting victims, so buying from a reputable retailer that has a secure supply chain is one of the best ways to ensure the authenticity of your computer's software," says Noble.

"It's great to see Microsoft taking the necessary steps to discourage the distribution of pirated software, and educating consumers on the dangers of using unlicensed software," says Darren Smith, General Manager of PB Technologies, a Microsoft reseller.

“Retailers selling unauthorised software are trying to undercut those of us who are doing the right thing by our customers. It’s just not fair business practice."

"Retailers that use reputable suppliers will be the winners in the end, as consumers become more aware of the risks associated with unsecured supply chains and unauthorised software, and will stick to trusted outlets," adds Smith.

When purchasing software consumers should follow the ‘Buyer’s Checklist’ to ensure your software is genuine.

1. Are you buying from a known and reputable retailer/seller?
Buy from a retailer or seller you know and trust.

2. Is the software you are looking to purchase much cheaper than from other retailers?
The general rule of thumb is proven time and time again – if it seems too good to be true, it usually is.

3. Are you able to contact the seller after you receive the software?
Be wary if the seller is reluctant or won’t provide a phone number, address and other pertinent contact details.

4. Does the seller have satisfied and happy customers?
When buying online, always look for feedback from other customers. If there is negative feedback, steer clear.

5. What is the seller’s return policy?
Make sure there is a way to return the product, and make sure that you feel confident that your seller will be willing and able to help you with after-sales service if there is a problem with your product.

6. When buying online, are the photos in the advertisement of the actual software being sold?
Be wary of stock standard marketing photos that may not be of the actual software you are buying.

7. Can you physically check the product?
If you can, check the product thoroughly before you purchase it. Use the How to Tell website to help you tell if it is legitimate software. Always be wary of sellers who are reluctant to let you view the product.

8. Are you purchasing the correct license?
For example, if you use academic software and you are not a student, lecturer or teacher, you are in breach of the license.

9. Does the software have a genuine Certificate of Authenticity?
A Certificate of Authenticity is a label that helps you identify genuine software. This is a visual identifier that helps determine whether or not the software you are buying is genuine. Check the Microsoft how to tell website to be able to tell the difference between genuine and fake Certificates of Authenticity.

Kiwis can also report sellers of counterfeit Microsoft products by emailing nzpiracy@microsoft.com, or by going visiting www.microsoft.com/nz/piracy and submitting an online report.

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