Business spies on the rise

10:07, Jul 17 2009
James Bond
REAL SPIES: Industrial espionage is on the rise in New Zealand as companies look for ways to gain an advantage.

Industrial espionage is on the rise in New Zealand as companies look for ways to gain advantage over competitors in a tight economy, say employment fraud experts.

In a recent case, an overseas retailer planning to move into the New Zealand market was found to have placed a spy in a rival operation.

Paragon managing director Ron McQuilter, who investigated the case, says the spy worked in a senior role for the rival retailer for six months.  He would not name the companies involved.

The staff member took the company's intellectual property, pricing structures, records and strategies.

''This guy had systematically taken everything from the company and set up almost a duplicate business. [The overseas retailer] would have come in with arguably an inferior product, but it would have looked the same and clients might or might not have known.''

In this instance the culprit was caught, but the police were not called in and the matter was quietly handled between the companies concerned. McQuilter says police are seldom contacted in cases of industrial espionage.


''Companies just deal with it. They might not want it to be known that they've had the problem in the first place.''

McQuilter says he has seen an increase in the number of requests to investigate potential espionage in the past six months.

''We used to do a couple a year; now we're doing probably one a month.''

And it's not just overseas competitors playing dirty. Local businesses are approaching aggrieved employees of their competitors to trade company secrets for cash  or even revenge for perceived poor treatment, he says.

In one case he investigated recently, a competitor recruited a rival staff member to hand over the company's marketing plan.

While Paragon conducts yearly office ''debugging'' sweeps for some of its corporate clients, as technology has become more advanced it is increasingly difficult to detect surveillance devices.

Business spies are now using pens with built-in cameras and recording devices, and watches that transmit signals, as well as the more conventional portable hard-drives and USB drives to store information.

Once a business suspects it is being spied on, Paragon investigators will conduct surveillance on the person concerned, often using the same tactics in reverse.

Such surveillance doesn't come cheap, but the cost for not following up such activity can be high. McQuilter believes New Zealand businesses are too relaxed when it comes to monitoring security. 

Slack processes and systems, and a careless attitude by management, are contributing to the problem.



The Independent