Common TVP fraud

BizMagnet consultant wrote about TVP fraud in 2020, around the third wave of epidemic. Nowadays, Hong Kong business environment changed completely, and many businesses closed due to social distance measures. Even the HKSAR Government launched number of supporting scheme, such as D-Biz, enhanced 100% Special Guarantee Loan scheme and extended Export Marketing Fund etc, local SMEs are extremely fragile still.

Many companies plan to strengthen the cash-flow with the TVP and the BUD Fund. Fraudsters understood their desire and prepared fraud to frame the business up.

Knowledge: TVP Funding for Dummies

Global pandemic gave an extreme impact on economy.

TVP trap 1: It’s FREE!

The Technology Voucher Programme (TVP) sponsors 75% of the IT project costs for local business with a maximum of HKD 600,000. However, some misconducted IT suppliers confuses clients that TVP applicants get all the thing for FREE and even cashback. These suppliers will first suggest clients to apply for IT system that far more than the needed, and cash back the clients with variety channels. These bad TVP consultants act as both suppliers and consultants and induce clients to exercise false instrument and conspire to defraud. If clients consent the suppliers act on behalf, it is very hard to defend.

According to court cases, the above crime usually leads to immediate imprisonment and the crime proceeds will be confiscated.

TVP trap 2: Let us do ALL

Another common statement in the fraud is “let us do all”. Fraudsters suggests client to let them do all the things. IT system is complex and the TVP application is also prolonged, it is quite demanding for SMEs to handle all the stuff. The fraudsters persuade clients with convenience, and obtain a small deposit amount to start. The clients just let the fraudsters help proceeding. Once the TVP application submitted, the fraudsters will demand a huge amount to continue the work. It is de facto a hijack. As the clients sign all the required documents and omitted the evil details, there is almost no chance to win a court case.

Further reading: Think carefully for application

TVP trap 3: No business, no action

The last trick is like this: a technology supplier set up a TVP consultancy. Then this “consultant” tries very best to persuade the client to choose the mother supplier. If the client doesn’t choose the specific supplier, this “consultant” will defer the application. For example, there may be some “accidents” to make the application deferred. The consultant may also require the client to provide many irrelevant documents. The purpose is to force the client to pick their choice or withdraw the application. Indeed this “consultant” is a puppet of the supplier and never serves the client appropriately. This also offends the competition ordinance.

How to spot the bad consultant?

There are many traps in the TVP consultation. In order to avoid lost and risk, is there any method to spot these problematic consultants? The below is our advice:

Many successful cases

Try searching “TVP consultant” or “BUD consultant“, there are always consultancies claiming that they have achieved huge amount of successful application with 100% success rate. It is just too good to be true, and customer should pay attention on it. In Hong Kong, the limited company registration of these consultancies are open information. Just a click to the Cyber Search Centre of the Company Registry (ICRIS)1 and we can reveal the incorporating date. If a consultant company, claiming hundred successful cases, was just set up in 2-3 years, you should investigate its background seriously.

If a TVP consultant claims 100% successful rate, you should be very cautious.

BizMagnet TVP consultant

Same address with IT suppliers

Moreover, we always emphasize that a IT supplier should not act as a TVP consultant in the same case. This may result the conflict of interest. A customer can learn the address of a consultant to see if the address also serves other IT suppliers. Or check if the consultants also provide other services such as IT system and marketing. These mean there is a high chance that the consultant is also a service provider. The dual identity makes it advice biased. If the clients does not choose the specific supplier, the consultation may be delayed.

Wise and careful TVP Application

BizMagnet consultants have witnesses many fail application. They are usually due to greed. Greed for money leads to conspiracy to defraud, greed for convenience leads to failing of the standard procurement process and so on. There is no free lunch. You have to be very alert if a TVP intermediary claims that you can get an IT system free or extremely cheap. If you need government funding consultancy service, please contact BizMagnet.

Reading: “100% Loan Guarantee” fraud