Microsoft investigates store selling pirated products

19:29, Sep 12 2011
PLUNDERED: This certificate of authenticity for Microsoft Windows XP Professional was taken from an IBM machine and even carries a warning about piracy.

A Hamilton computer store has been caught selling pirated Microsoft products that are useless when customers get them home.

And the case is the tip of the software piracy iceberg with online auction giant Trade Me saying it pulls thousands of dodgy software listings off its site each year.

Microsoft, the world's biggest software company, is investigating Angelsea St store Smart PC after Flagstaff computer user Matt Schmitt complained to the Waikato Times about his Smart PC experience, in which personal data was destroyed and he was left $500 out of pocket.

Mr Schmitt paid Smart PC $199 for a new copy of Windows XP after discovering a previous copy, installed by a friend, was pirated and would not update over the internet. It took seconds for the out-of-date system to fall foul of malicious software, such as viruses and spyware. When Mr Schmitt, an office worker, asked Smart PC for a genuine copy of the software he was handed a Microsoft Windows XP certificate of authenticity sticker containing a 25-character product key licensed to an IBM machine.

"They said we did not need the disk," Mr Schmitt said.

Mr Schmitt asked store staff several times for a disk and if they could not supply one then a refund instead. "They said we had to (take it), we had paid for it."


When he got it home Mr Schmitt discovered the key would not activate his software. He was denied a refund the next day when he returned to the store, so called in Sean Williams of Backspace Computer Support, who supplied and installed a genuine copy of Windows.

"They were having all sorts of problems ... which made the system vulnerable."

The Times sent a mystery shopper, with a story similar to Mr Schmitt's, into the store on Monday and he was offered a Microsoft Windows certificate of authenticity without a disk for $129.

The Times asked Smart PC manager Cindy Xia whether she would sell certificates of authenticity without a disk.

"Sometimes. It depends on the situation. It could be some special occasion."

She could not tell the Times how many she had sold.

Asked if she knew such a sale was illegal, she said: "I think it's OK. If it's a retail version it should be OK. I am not sure where it came from."

Dr Mark Rees, chief technology officer at Microsoft New Zealand, said transferring software product keys without a valid software licence was illegal and and a breach of copyright.

"We take this very seriously because it puts consumers at risk from malicious software.

"We need to investigate fully to understand exactly what happened and what our course of action is going to be."

Smart PC offered Mr Schmitt a refund this week if he returned the key to the store, but Consumer NZ technology writer Hayden Green suggested he hang on to it to aid Microsoft in its investigations.

"He's been scammed out of his money," he said.

"The only way you can get a legitimate copy of Microsoft Windows is on a disk. It's absolutely dodgy.

"The Consumer Guarantees Act is the smallest of their (Smart PC's) worries."

Mr Green said few consumers would know enough about computers to know there was something wrong with being offered a certificate of authenticity without a disk.


Half of us can't tell genuine software from pirated software, even when we're pre-warned. Microsoft loaned the Times two copies of Windows 7. One was genuine and one was pirated. Of the dozen people the Times asked to pick the fake one, half got it wrong. Even the IT professionals. There are a few quick things you can look for to make sure that you're getting what you're paying for when buying a new or used PC, Microsoft says. A certificate of authenticity should always accompany the product with which it is associated and cannot be purchased separately from the product, neither can reinstallation discs. Simple things like spelling errors on packaging can help identify counterfeit software accompanying a PC purchase. Incorrect logos and photos that don't correspond to the product can also indicate something isn't quite right.

Waikato Times