Vendors have been urged to crack down on warranty fraud among resellers and end users after research found it is costing them three to five per cent of their revenues.
According to a white paper by the Alliance for Grey Market and Counterfeit Abatement (AGMA) and PwC, warranty and services abuse has gone under the radar, but is a growing threat for vendors and bona fide partners.
Some 87 per cent of AGMA members fingered business partners as a source of entitlement abuse. Common forms of abuse include counterfeit exchange, RMA non-returns and over-usage.
AGMA stressed that abuse was typically perpetrated by a rogue few.
“Often, seeking the partner authorisation and signing a contract are part of a fraud or service abuse scheme,” it said. “Generally these entities are career criminals who have no intention of abiding by a service partner agreement.”
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