Introduction

Multi-Level Marketing (MLM) is a system of marketing that has been around for some time. Also known as Network Marketing, it is a method of distributing products that involves little or no mass advertising. Instead, marketing of the product is spread by word of mouth of its users.

Of course, word-of-mouth marketing is around even longer than MLMs, so what makes it different? Unlike traditional word-of-mouth marketing, the users who spread the word for the company, and gets others to buy the products, gets a commission for doing so. The person who spreads the word is called the Sponsor or Upline, while the person whom he sponsors is called his Downline.

To make the deal even sweeter, the company gives the Sponsor a commission for products the Downline of his Downline buys! Many companies allow each Sponsor a network up to 6 levels deep. Hence the name for this style of marketing - Multi-Level Marketing or Network Marketing.

Legal Concerns

Legally speaking, MLMs have been legal in Singapore since June 2000, when the government finally recognised it as a method of product distribution, rather than a Pyramid Scheme. The U.S. government (the land where MLMs first originated with a company called Amway) has slapped a whole list of conditions on an MLM system to set it apart from Pyramid Schemes.

Ethical Concerns

To me, many MLMs toe a very thin line to Pyramid Schemes. The problem does not lie with the marketing system (which actually represents a very cheap method of product distribution for the parent company). Rather, it lies with the people who promote the products. In some cases, the way the system is run by the company also makes it a form of legalised Pyramid Scheme (if there is such a thing).

Why do I say that the problem lies with the people who promote the products? The problem is with the fact that it is promoted as a means to get rich. Its promoters want the downlines at all costs - it means more money for them. In order to get the downlines, they push the business model and use hype and emotional draws to appeal to those who are looking for more income.

More often than not, the products are very expensive and marketable only to certain segments of the population (e.g. health products). In addition, many who are drawn to such MLMs are actually not prepared for the kind of sacrifices and time required for the business to work. It can take as long as 1-2 years, and thousands of dollars in expenditure before a profit can be turned in. These are the hidden stuff that many promoters did not mention, in their push for more people in their downline (and hence greater wealth for them).

Another practice many companies have (that makes for high dropout rates) is that of a maintenance. Each month, their distributors must buy a certain amount of their product to keep their downlines. With increasing expenditure and of both money and time (especially time) and sometimes alienation from friends and family (due to overzealous promoting of the products to get a downline), the distributor gives up - and all their work goes down the drain.

The final point that personally bugs me is the fact that the promoters always harp on the fact that MLM is a sure-win business model. They insist that everybody can succeed in having the MLM as a business, to attain financial freedom.

Let me put it across very plainly. Is it possible for everybody to earn money from MLM? In order for a person to earn money from MLM, you need a critical mass of downlines (as little as 256 persons or as many as 1024, if not more). Mathematically, it is a folly to assume that there is no bottom of such a pyramid network. For those near the bottom, where are their critical masses coming from?

Ultimately, there must be somebody who is taking money from outside of the MLM structure, and pumping it into the network of sponsors above. Now, I have no problem with that. There might be those who buys the products without taking it as a business (also known in network marketing circles as consumers). I was one of them (my money comes from outside of the MLM structure). However, to push MLM as a business where everybody can make money is simply unethical.

Conclusion

I personally do not have an anti-MLM pose (I used to be a consumer, but not an active MLM business leader). To me, it represents a distribution system that takes away the wealth from the big boys (the advertisers, the warehousing systems, the transport systems, etc) and put it in the consumers themselves. For those who went in early and helped the company market their products, their income will increase.

For those who come in later, however, it is a different story. My desire, for those who read this article, is to warn against the hype and emotional traps that comes from a desire to get rich quick. I also hope (against hope, perhaps) that those promoters who have been pushing that mathematically-impossible model will at least tell the truth to their potential downlines.

I welcome all feedback on this article. Till then, may you find health and wealth in your endeavours.

Michael Chan used to be a teacher, before he left to run a managed fund. When his business failed, he returned to teaching, and is currently a Department Head at the Shanghai Singapore International School.

He constantly applies his business acumen to his job, to add value to his employer. His thoughts on K-12 education and on financial education can be found in his blog at http://www.senseimichael.com

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Since the inception of the information technology and the technological advancement of the marketing industry, many people are engaging into fraudulent activities. This is because they are able to gain financial gains and advantages to people through easier and faster means.

For this reason, authorities had been trying to suppress the growing trend of various frauds that are currently affecting thousands, if not millions of people.

Basically, fraud is a kind of trickery that is used for the individuals benefits, mostly on the financial aspect. These kinds of frauds are absolutely punishable by law, though, its implementation and intensity may vary from one place to another.

In Criminal Law

In the context of criminal law, a fraud is absolutely punishable under certain circumstances that will constitute the deception of a certain individual from which personal gain of the fraudulent person is achieved.

Some of the common frauds that are abhorred by the law are:

1. False advertising

This refers to the achievement of some personal gains of the person concerned by give the wrong impression about a particular service, product, or a business. This can be executed by providing deceptive information projected in unreliable forms of advertisements.

2. Identity theft

In the credit card industry, identity theft is the common type of fraud. This is when the identity of the credit card user is stolen for the personal benefit of the person who wants to gain some financial access to the users finances.

There are instances that the criminal may use the identity of the credit card user to make some purchases, in which, the victims credit card is used. In turn, the victim will receive billing statements containing such purchases that he or she did not personally created.

There are also some cases wherein the identity of the victim is used to create some crimes, in which, after establishing such acts, they contact the person and blackmail him by asking some money in exchange of eliminating any criminal acts that were constituted through his name.

3. Forgery

This is also one type of frauds where the documents are obtained and processed with the purpose of using them to deceive other people or institution.

In this process, the person who ant to deceive other people will obtain documents that are fake, reproduced, replicas, or explicit reproductions of the original material. There are also some documents that may be originally done but the signatures that should have signified the authenticity of the document is forged.

The very concept of this kind of fraud is to modify an object to suit the personal gains of the offender.

4. False billing

This refers to the fraudulent undertaking of charging or creating billing statements to a particular person or an institution. Here, the criminals will extract money from these people, in which, the concerned person will think that it is part of his or her subscription on a certain company.

In this way, people may be deceived that they have been issued some renewal of their subscriptions, for example, but in reality, the true owner of such establishment that issues subscriptions are not aware of it.

5. Insurance claims

These refers to the act of deceiving the insurance provider under the guise of claiming the due claims and benefits.

For instance, there are some people who create fake deaths in order to claim the insurance benefits provided by the individuals insurance provider.

These are just some of the many examples of frauds. All of which are punishable under the law.

Hence, if you think that you have been victimized based on the examples given, it is best to take some actions properly, otherwise, you will be left hanging on the brink of disaster.

Robert Thatcher is a freelance publisher based in Cupertino, California. He publishes articles and reports in various ezines and provides fraud prevention resources on http://www.allaboutfraud.info

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I was trying to figure out a way to work the Pittsburgh Steelers into a Weekly Insight, particularly after our hometown team earned the right to be called World Champions. I realize that not everyone who reads these Weekly Insights hails from Western Pennsylvania (and some of you might not care for the Steelers at all), but hang in there with me on this one.\r Steelers mean business was the title of an Associated Press article on February 4, 2006. Dr. Joanne G. Dujansky, the founder of KEYGroup, a Pittsburgh business that counsels companies on creating a successful corporate culture was quoted in the article as follows: The Steelers winning tradition didnt start yesterday. It started when Art Rooney purchased the franchise 73 years ago and set in motion a strategy for success that embraced his vision and values.

Note that Mr. Rooneys strategy included values as well as vision. This past week a student in my marketing strategy class did some research on jetBlue Airways. When she could not find their mission statement on the company website, she emailed the company and asked if they would provide her with jetBlues mission statement. The company responded that they did not have a mission statement. Instead, they found success in the marketplace by living out their core values: safety, caring, integrity, fun and passion.

The key words here are living out. Values do matter.

With that in mind, lets examine some of the principles outlined in the book Lasting Change: The Shared Values Process that Makes Companies Great (by Rob Lebow and William L. Simon). The authors take the concept of values and define two components:

People Values basic human issues that affect daily work performance such as honesty, truthfulness, trust, risk-taking, and receptivity to new ideas

Business values define how the organization and its people function; these are the principles upon which everyone in the organization operates; business values clarify who we are, what we stand for, and why we do business the way we do

For an organization to function effectively, these two are always in balance.

Its interesting that the authors contend that although every company has a set of Business Values, most people, even managers, arent aware of them. Or even better, just ask several people what the Business Values are for your organization and get ready for a lot of different answers.\r In my tenure as President of Zion Industries, I learned that Business Values cant be taught. They must be absorbed by individuals in the organization as they see executives and managers making decisions based on Business Valuesand explaining to the employees the why behind tough decisions (We did this because our Values state).

There is a great story in this book about old man Coleman, the founder of the company. Although retired, he dropped in one day on a production meeting. He listened as the executives in the room discussed a defective gas jet in one of the products that leaked under pressure. They had to make a decision: should the company, famed for its impeccable quality, publicly admit the defect and launch a product recall?

Since only a few of the several hundred thousand units already on store shelves were thought to have the leaking problem, the marketing person suggested that they just wait until the bad ones were found and sent back, thus avoiding a costly recall.

Mr. Coleman slammed the table and demanded, Whats the matter with you people! Dont you know that Coleman lanterns have to work?!\r To the company founder, the values were clear. There was no room for negotiation or discussion about a defective product. Is there such clarity in your organization?

Values do matter. Values drive decision making. Values drive behavior. Values drive thinking. Yet how much time do we spend thinking about our Personal Values, our Business Values? How often do we assess whether the Business Values we espouse, the ones printed on the wall, etc. are actually being lived out day to day in the marketplaceduring the good and bad times?

Living out your values makes them meaningful. Consider these words regarding values:

As officers and employees of _______…we are responsible for conducting the business of the Company in accordance with all applicable laws and in a moral and honest manner. _____ stands on the foundation of its Vision and Values. Everything we do evolves from our vision and Values statements. The above is a short extract from Enrons award-winning Code of Ethics. As events have shown, Enrons Values were not meaningful at all; in fact, they were meaningless. And their lack of meaning stemmed from the actions and attitudes of their executives.

And so the challenge becomes one of understanding and committing to my own Personal Values and to the Business Values of my organization. Heres an assignment for each of us to do this week in response to this challenge.

1. Write down your Personal Values. What do you stand for? Do these values really guide your behavior?

2. Write down your organizations Business Values. What does your company stand for? Can you think of decisions made during the past month or so that were made because of your Business Values? Do you see your companys Business Values reflected in your personal actions within your organization? How about in the lives of company employees?

Values do matterbut only if they are lived out. Values are more caught than taught. Thus, our children, our employees, our community know our values, not by reading our Core Values document, but by watching us every day. How are we doing?

What do you think? Does this make sense to you? If youd like to share your thoughts with me, please do so at keith@daystarconsulting.com or visit http://www.daystarconsulting.com.

Keith Starcher is President of DayStar Consulting, Inc., a firm serving small business owners by providing insights and ideas regarding marketing strategy and strategic planning. Dr. Starcher has 30+ years of experience in both Fortune 500 and small, family-owned companies. His primary objective in counseling small-business owners is to help them create a blend of resources and capabilities that lead to competitive advantage in the marketplace and bring glory to God while doing so.

Keith also is an associate professor in the business department at Geneva College, Beaver Falls, Pennsylvania where he studies and lectures in marketing strategy and strategic planning at the undergraduate and graduate levels

Dr. Starcher spent several years with General Electric and, prior to joining the full-time teaching staff at Geneva College, he was President of Zion Industries, an induction heat-treating firm with plants in Ohio, North Carolina and Michigan.

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Ethics in professional accountancy are of utmost importance. Now as the business and financial world is adopting international accounting and auditing standards, it is becoming all the more necessary to adhere to certain Code of Ethics prescribed by international and national accountancy bodies. Before arguing in favour of the topic, lets have a look at some basic concepts:

Profession

A profession is an occupation that requires extensive training and the study and mastery of specialized knowledge, and usually has a professional association, ethical code and process of certification or licensing; for example engineering, medicine, social work, teaching, law, finance, the military, nursing and Accountancy etc. Classically there were only three professions: military, medicine and law. Each of these professions holds to a specific code of ethics and members are almost universally required to swear some form of oath to uphold those ethics, therefore professing to a higher standard of accountability. Each of these professions also provides and requires extensive training in the meaning, value and importance of its particular oath in practice of that profession.

Accountant

Practitioner of Accountancy is known as Accountant. Qualified Accountant, Accountant, Professional Accountant or Accountancy Practitioner is a legally certified accountancy and financial expert. Accountants not only work in public practice but many of them are working within private corporations, in financial industry and in various government bodies. Accountancy (profession) or accounting (methodology) is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities, lenders and other stakeholders and decision makers to make resource allocation and policy making decisions.

Like many other professions there are many professional bodies for accountants throughout the world. Some of them are legally recognized in their jurisdictions such as British qualified accountants including Chartered Certified Accountant (ACCA or FCCA), Chartered Accountant (CA, ACA or FCA), Canadian qualified accountants such as Chartered Accountant and Certified General Accountants (CA or CGA) and American qualified Accountants such as Certified Public Accountants (CPA) etc. Some other statutory and non-statutory accountancy qualifications are Certified Management Accountant (CMA), Associated Cost and Management Accountant (ACMA), Certified Financial Analyst (CFA) and Certified Fraud Examiner (CFE) etc.

In Pakistan, the Institute of Chartered Accountants of Pakistan is the sole professional and accountancy body with the right to award the Chartered Accountant designation. ICAP is the member of IFAC (International Federation of Accountants, IASB (International Accounting Standards Board), Confederation of Asian & Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA). The members of ICAP have reached to 4,089 as of March 1, 2007 data.

Role of Professional Accountants:

Accountants are independent business advisors. Accountants can offer an extensive range of services. Accountants can be registered auditors, can set up clients accounting systems, can be an advisor on tax planning, or a detector of frauds and embezzlements, can do budgeting and financial statement analysis, advise clients on financing decisions, provide specialist knowledge and can help maintaining an ethical environment.

After discussing the basic concepts and role of professional accountants we are in a better position to ponder on what professional ethics is and why it is important in the field of accountancy.

Definition of Ethics

The word Ethics is derived from the Ancient Greek word ethikos; means customs and habits. A major branch of philosophy which is the study of values and customs of a person or group and covers the analysis and employment of concepts such as right and wrong, good and evil and dos and donts.

Code of Ethics:

In the context of a code adopted by a profession or by a governmental organization to regulate that profession, an ethical code may be styled as a code of professional responsibility, which may dispense with difficult issues of what behaviour is ethical. A code of ethics is often a formal statement of the organizations values on certain ethical and social issues relating to the profession and practice of the professional knowledge. This also includes the principles and procedures for specific ethical situations.

Ethics in Professional Accountancy:

The general ethical standards of society apply to people in professions such as medicine, law, nursing and accountancy etc just as much as to anyone else. However society places even higher expectations on professionals. People need to have confidence in the quality of the complex services provided by professionals

Ethics in accountancy profession are invaluable to accounting professionals and to those who rely on their services. Stakeholders including clients, credit grantors, governments, taxation authorities, employees, investors, the business and financial community etc perceive them as highly competent, reliable, objective and neutral people. Professional accountants therefore, must not only be well qualified but also possess a high degree of professional integrity. Because of these high expectations, professionals have adopted codes of ethics; also known as codes of professional conduct. These ethical codes call for their members to maintain a level of self-discipline that goes beyond the requirements of laws and regulations. Each of the major professional association for accountants has a code of ethics.

As mentioned earlier, professional accountants can be of two types. One who work in firms or independently run those firms that provide accounting, auditing and other advisory services to clients; these are called public practitioners. Others are those who are employees of organizations and may serve as internal auditors, management accountants, financial managers and financial analysts. Regardless of the role of accountants, they are adhered to code of ethics which are applied to their professional conduct although there are some special provisions for those in public practice [Reference: Code of Ethics for Professional Accountants-International Federation of Accountants (IFAC)].

International Federation of Accountants-IFAC:

The International Federation of Accountants (IFAC) is a federation of all accountancy bodies throughout the world. All the major international and national associations like ACCA, AICPA, ICMA, ICAP, IASB etc are all its member organizations. The mission of IFAC, as set out in its constitution, is the worldwide development and enhancement of an accountancy profession with harmonized standards, able to provide services of consistently high quality in the public interest [Ref: Code of Ethics for Professional Accountants-IFAC]. In pursuing this mission, the IFAC Board has established the IFAC Ethics Committee to develop and issue, under its own authority, high quality ethical standards and other pronouncements for professional accountants for use around the world. The Code of Ethics establishes ethical requirements for professional accountants. A member body or firm may not apply less stringent standards than those stated in this Code.

The objective of setting this code of conduct is to harmonize these standards and practices on a global perspective. Public can only trust these highly professionals when it is made mandatory to observe and follow strict regulations and codes throughout the world. A professional accountant is required to comply with the following fundamental principles mentioned in this Code of Ethics:[Ref: Section 100.4 Code of Ethics for Professional Accountants]

Integrity: A professional accountant should be honest and straightforward in all professional and business relationship.
\r Objectivity: A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
\r Professional Competence & Due Care: A professional accountant has a continuing duty to maintain professional knowledge and skills at the level required to ensure that a client or employer receives competent professional service. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services.
\r Confidentiality: A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose nay such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. This information should not be used for personal advantage by professional accountant.
\r Professional Behaviour: A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.

Code of Ethics defined in Members Handbook for members of ICAP Pakistan is in conformity with:
\r IFAC Code of Ethics and International Auditing Standards
\r International Accounting Standards
\r The Institute of Chartered Accountants of Pakistan ICAP
\r Relevant legislation

[Ref: Members Handbook-ICAP]

This Code of Ethics has discussed in detail the role of Chartered Accountants in given situations. For example there are clear directives on prohibition of acceptance of gifts, long association with clients, advertising of firms name exceeding prescribed limits, holding clients monies for no sound reason, disclosure of clients records (except ones that are allowed), acceptance of fees offered by client which is less than that prevailing in market etc.

After discussing in detail the importance of ethics in accounting profession, we are to conclude the topic with this final note that accountancy as a profession is acceptable and relied upon only when ability to exercise professional judgment based on a foundation of ethics; broad but deep technical excellence and strategic awareness are exercised by a professional accountant. Only then general public can trust the integrity of this profession.

The Author is an ACCA student and is working for United Nations Population Fund

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Compliance training gets no respect. Training managers view it as something of a bugaboo. Most trainees greet it with about as much enthusiasm as they would a parallel parking contest. So what is it, why do we need it, and how can we best go about it?

Well, government regulations and business best practices dictate that you not only conduct certain courses but also maintain records to show that they have been taken and understood by all concerned. Not offering such training can jeopardize the health and safety of your workers, earn the ire of your shareholders, and/or get you on the wrong side of the regulatory authorities.

Here are some examples of compliance training:

Human resource issues: Such as equal opportunity, workforce diversity, and sexual harassment.

Business ethics: A large organization will have need for courses that deal with general business ethics as well as the more specialized needs of those in sales and marketing, accounting/finance, information and document management, and corporate governance (Serbanes Oxley or SOX compliance requirements). Moreover, certain industries, such as real-estate and lending, will have additional requirements specific to their business.

Occupational safety: US Occupational Safety and Health Administration (OSHA) regulations on both general occupational health and safety and the special needs of industries such as construction, food service, and healthcare.

Industrial safety: OSHA and other standards that seek to prevent injuries, accidents, chemical spills, fires, and explosions.

Driver safety education: For those who operate vehicles that are part of corporate fleets.

HIPAA training: For healthcare workers on how to use and share patient information in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Whats the ideal platform for such training? To answer that question, we need to examine the characteristics of compliance training, which are:

Its required by large numbers of people, often within a short timeframe.

Its often repetitive.

The course content, once developed, is fairly stable (though subject to adjustment as regulations get fine-tuned).

Even locations that have only one or two employees must undergo this training.

And, of course, it demands good record keeping.

Except for the needs of specialized industries, the course content once developed can be sold to a very large national, sometimes international, customer base.

What we have just listed are the exact situations in which e-learning is both appropriate and cost effective. E-learning has the ability to perform volume training quickly and relatively inexpensively, even when there are one or two participants per location. Its also just-in-time and self-paced, allowing it to be more easily squeezed into a crowded work schedule. All those make e-learning the ideal vehicle for compliance training. What about the records? When e-learning is delivered from an LMS, record-keeping is automatic and effortless!

Now, whats this LMS? A Learning Management System is software that allows you to display on your corporate intranet all of your training offerings, whether instructor-led or self-paced, as well as track the progress of everyone taking these courses anywhere at any time in your company. LMSs, while quite useful, can be pricey, ranging in cost from many thousands to over a million dollars. They can also be hard to select, customize, install, and operate.

Does it ever make sense to offer instructor-led training (ILT) classes on compliance issues? Theres no better training than an ILT class taught well! There are topics related to people issues, for instance cultural diversity and sexual harassment and perhaps some aspects of SOX compliance training, which can be taught with much greater impact in an ILT setting.

So how do you implement compliance e-learning and an LMS without going broke? Here are some tips and ideas that will make the job easier:

You can buy compliance e-learning from either a vendor specializing in a particular type of compliance training, for example, just human resource, occupational safety, or SOX training. (SOX training has become an industry by itself.) If the need of the hour is to address a particular compliance issue quickly, this may do. You can also buy it from an e-learning vendor that provides a variety of compliance and general e-learning. If youre looking for a comprehensive solution addressing several compliance and/or general training requirements, this is the way to go. I should add here that there are sources of compliance training that are often overlooked, e.g., trade associations and nonprofits such as the National safety Council.

Most large sellers of e-learning offer courses produced by the same old producers of quality e-learning courses. Given that, it may make sense to buy your e-learning from a smaller, low-overhead discount vendor than a large name-brand vendor service and everything else being equal, of course. Doing your homework can help you stretch your training dollar.

There are e-learning vendors who will allow you to run any e-learning courses bought from them off of their servers, using their LMS, saving you the expense and trouble of acquiring/operating both an LMS and the information technology infrastructure needed to host and support the e-learning libraries. If you have any third-parry e-learning courses, you will not be able to run them off of this vendor-provided gratis LMS, but if your objective was to track your compliance training for free, that objective has been achieved.

There are vendors that offer both e-learning and ILT solutions. Some of them offer knowledgeable blended learning consultants who can help you take the best of the e-learning and ILT worlds and put it all together into packages that score high on the quality/effectiveness scale but are easy on your budget. A blended learning package might, for instance, combine e-learning courses on mass market compliance topics with high-impact ILT courses on sensitive human resource needs, especially if such courses require customization to your companys culture or processes.

Finally, ask questions; insist on answers. Take the e-learning courses out for a test drive before you buy them. Make sure the courses are interactive and fun. Find out if the vendor has blended learning consultant who can help you combine e-learning with ILT in just the right way. Compliance training needs to be effective, or it hasnt met your basic goals. It needs to be affordable. And it needs to draw and hold the audience attention. After all, you dont want to be known as the impresario of parallel parking events!

KK Arora is President of Eogogics Inc., a one-stop source of all training (technical and non-technical, e-learning and ILT), former Vice President of Human Capital Management of LCC International, and Founder and Managing Director of Wireless Institute. A scientist turned educator/trainer, hes equally at ease in the world of high-tech and high-touch. His twenty five year career includes pioneering work in adult education and computer based training and distinguished contributions to the development and retention of high-tech human capital. For his bio: http://eogogics.com/bios/KA For information on Eogogics Inc.: http://eogogics.com/\r For information on the Eogogics e-learning programs: http://eogogics.com/institute\r To contact KK Arora: kk@eogogics.com

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Business Ethics have only come to the fore recently. They state that there is more to business than just making a profit. The new focus is also on how the business treats the environment, reacts with the local community and works with its staff to build a responsible company that is both sustainable and adds value to the people that it interacts with.

\”Greed is good\” is no longer acceptable to most consumers. The consumer is now better educated with new means at his disposal. High speed internet access and forums like Ecademy now mean that good and bad news travels almost at the speed of thought. They are now demanding more from businesses even though their own ethics at times might be questionable!

Business ethics are now included in most business courses and the top management schools. The top graduates enter the corporate world ready to incorporate what they have learnt in the classroom.

Businesses need to have specific programmes in place to manage their staff and workplace in a responsible manner. They must give social welfare a high priority if they are to maintain their public image. They have to be seen to be recycling their waste and disposing of old equipment in an environmentally friendly way.

Businesses now have to be wary of using sweat shop labour in the third world especially if they treat them badly. Everybody realises that third world country wages are lower but they expect Western companies to treat their employees with some respect and dignity. Businesses that employ children are now frowned upon even though child labour is the norm in these countries.

Many \”watch dogs\” now exist that \”police\” most large companies and report any blatant abuse of ethics. Most of these have only been set up in the last twenty years. Most large media organisations also have special reporters whose sole purpose is to identify where breaches are taking place and publicise them.

The top brands in the world need to be extremely careful now. The value of a brand might have taken decades to build but can be destroyed in a matter of weeks. An example of this is when Gerald Ratner made a speech to the Institute of Directors and in humour referred to a cheap necklace that \”everyone knows is crap\”. These comments served to wipe out over a half a billion dollars of the companies value and played a major part in the downfall of a once thriving jewellery retailer in the United Kingdom.

There are now funds that specialise in only investing in ethical businesses. They refuse to invest in companies that produce weapons or manufacture cigarettes as an example. These funds have taken of spectacularly and have billions of dollars to invest in the stock markets. Before they invest in a business they send their fund managers in to investigate the business fully to see if they comply with their guidelines. If the company is not willing to answer all their questions fully then they might not get approved for investment.

When properly managed and executed the use of business ethics can actually serve to enhance the profitability of the company concerned. The business can proudly declare their values in brochures, newspapers, internet and television marketing campaigns. Reputation is the strongest asset that a company has and maintaining this and the value of their brands is essential to the long term future of the business.

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The current regulatory environment enveloping the title insurance industry is clouded by constrained enforcement resources, minimal oversight of title agents and a lack of coordination among state and federal regulators, according to the U.S. Government Accountability Offices (GAO) long-awaited report on the title insurance industry.

On April 17, the GAO, the investigative arm of Congress, released the results of its much ballyhooed probe of the title industry, launched a year ago at the request of then-House Financial Services Committee Chairman Michael Oxley.

The report, titled Title Insurance: Actions Needed to Improve Oversight of the Title Industry and Better Protect Consumers, identified significant barriers to the successful regulation of the title industry, but for every weak link in the regulatory chain, the GAO offered a remedy, calling for the active participation of federal, state and local regulators.

Given consumers weak position in the title insurance market, regulatory efforts to ensure reasonable prices and deter illegal marketing activities are critical, the report stated. Given the variety of professionals involved in a real estate transaction, a lack of coordination among different regulators within states, and between HUD and the states, could potentially hinder enforcement efforts against compensation for consumer referrals. Because of the involvement of both federal and state regulators, including multiple regulators at the state level, effective regulatory improvements will be a challenge and will require a coordinated effort among all involved.

This effort is one strongly supported by all industry players, but exactly how and when the GAOs recommendations will be implemented is a source of some debate.

Frustration exists at federal and state levels
\r Limited state and federal oversight of the title industry has resulted in proposals for change, the GAO found, but those changes are focused on the state level, mainly in the affiliated business arena.

Some state regulators expressed frustration with HUDs level of responsiveness to their requests for help with enforcement, and some industry officials said that RESPA rules regarding ABAs and referral fees need to be clarified, the GAO said.

However, the more limited regulation and oversight of title agents and AfBAs in less active states could provide greater opportunity for potentially illegal marketing and sales practices, the GAO said. While the GAO listed states such as Colorado, California and Minnesota as leaders in enforcement and oversight, the report concluded that states enforcement of anti-kickback and referral fee provisions were uneven.

That would place the onus on HUD, but HUD officials expressed concern over a lack of enforcement authority for RESPA Section 8 violations, the GAO said.

According to HUD officials, it is difficult to deter future violations without stronger enforcement authority, such as civil money penalties, because companies view small settlements as simply a cost of doing business, the GAO said.

Viewing these concerns as critical to the health of the industry, the GAO made a number of recommendations to improve oversight at each government level as well as to better coordinate the various efforts of those regulators.

Agents: Wheres the beef?
\r State regulators could most benefit by examining title agent costs, the GAO found. Officials in several state insurance departments last year questioned whether agents are worth their premium splits, and the GAO quickly picked up on this debate, finding that regulators do not fully assess title agents costs during rate reviews.

Few regulators review the costs that title agents incur to determine whether they are in line with the prices charged, the report stated. In fact, in the majority of states, agents costs for search and examination services are not considered part of the premium and thus, receive no review by regulators. Therefore, title agents charge separately for their search and examination services, yet they receive about the same percentage of the premium as agents in states where these costs are included in the premium.

Title insurers told the GAO that they generally share the same percentage of the premium with their agents, around 80 to 90 percent, regardless of whether those agents were in states where consumers pay for agents search and examination services within the premium rate known as all-inclusive states or whether they were in states where agents can charge consumers separately for those services known as risk-rate states.

However, reliable data to determine whether consumers in risk-rate states consistently paid more than those in all-inclusive states does not exist, the GAO said, and thus recommended a multi-step process that could involve detailed analysis of some title agents. While the GAO placed the onus of this auditing function on state insurance regulators, some industry experts pointed out that reporting requirements currently vary by state, making it difficult for some companies to provide the type of uniform data needed to form constructive conclusions.

In California, for example, some companies are concerned that the Department of Insurances proposed statistical reporting requirements will force them out of business, as they cannot now provide data from past years that was not required of them at the time.

Some of the information the GAO wants to collect drills into personnel and hiring practices and micromanages the entire process, said Joe Petrelli, founder of Demotech, a ratings firm based in Columbus, Ohio. Its a level of detail I dont think people have. Its a tremendous layer of fixed overhead that no one anticipated, and its not like you can snap your fingers and get that type of detail.

Matters for Congressional consideration
\r As far as Congress role in the melee, the GAO recommended that Congress reevaluate certain aspects of RESPA.

Revisiting RESPA to ensure that consumers receive this information as soon as possible when they are considering any type of mortgage transaction could be beneficial, the GAO said.

The GAOs recommendations to Congress were twofold. Congress could provide HUD with increased enforcement authority for Section 8 violations, such as the ability to levy civil money penalties. Congress could also make a detailed homebuyer information booklet available to consumers.

These recommendations are in line with what HUDs RESPA office has likely been discussing since Fall 2005, when the department retreated into its chambers to mull over RESPA reform. Thus, by all accounts, the GAOs Congressional recommendations stand a fair chance of becoming reality.

HUD has long sought such authority, and the GAO report may be HUDs best chance to get it, said Rich Andreano, partner with the Washington, D.C., law firm Weiner Brodsky Sidman Kider PC.

Doubting Thomases
\r But the apparent consensus between HUD and the GAO does not mean these recommendations will see the light of day, at least in the foreseeable future, said some skeptical industry leaders.

Some industry players are hedging their bets that the recommendations will be swept under the carpet as Congress contemplates changes to predatory lending and FHA reform.

Noted RESPA attorney Phil Schulman of Kirkpatrick & Lockhart Preston Gates Ellis said, The timing of the report works in the industrys favor, given that the focus on Capital Hill and elsewhere is on subprime lending and the avalanche of foreclosures, not title insurance reform.

National mortgage training expert Christopher Cruise observed that the title insurance industry has dodged a bullet here. Asking the states to step up their enforcement activities seems reasonable, but, except in a few states with strong insurance commissioners, that simply wont happen. I believe, in the long run that this report will have minimal effect and that title insurance rates will change little, if at all.

Ken Trepeta, regulatory policy representative for the National Association of Realtors (NAR), likewise said, The RESPA civil penalties issue is intriguing, but I wonder if anyone in Congress really has the stomach to revisit RESPA. I know Sen. [Mel] Martinez is interested in RESPA, but he has spoken more along the lines of disclosure.

The writing on the wall
\r Although some are skeptical that the report will matter much in this era of increased scrutiny on predatory lending and mortgage issues, others believe it is a fallacy to say that the problems of the title and settlement services industries are that far removed from the problems in the mortgage industry.

Indeed, Rep. Spencer Bachus, R-Ala., ranking member of the House Financial Services Committee, has commented, The GAOs findings are significant, and I look forward to reviewing those findings thoroughly.

Some respected sources have indicated to The Legal Description that Congress has been waiting for the results of the GAO report in order to determine if there were issues that needed to be addressed before putting RESPA and title industry reform on the front-burner.

Other industry leaders willing to speak on the record agreed that this scenario is not as farfetched as some skeptics believe.

Congress obviously is still reviewing this and will be, I presume, taking that under consideration along with any other appropriate legislation, said Sue Johnson, executive director of the Real Estate Services Providers Council Inc. (RESPRO). I would be surprised if Congress did not touch base with HUD to check on the status of their RESPA rule and consult with them. A lot of this has to simply play out.

Andreano was perhaps most confident in the prediction that Congress will put all of the pieces of the puzzle together to bolster its ongoing homeownership initiatives.

I think its safe to say that the GAO will not be on the title industrys Christmas list this year, Andreano said. While the report focuses on, and is critical of, the title industry, all settlement service providers need to focus on Congressional reaction. Clearly, title industry revenues are now under a microscope and the industry needs to be prepared to address scrutiny from regulators and lawmakers.

Amy Swinderman is the editor of The Legal Description, a trade publication specializing in focused analysis of legislative, regulatory and legal issues facing the title insurance and real estate settlement services industries. The Legal Description is a publication of October Research Corp, the nations premier provider of real estate industry news and analysis.

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Globalization and technology developed at a rattling rate make our lives more comfortable but we are stranded in a tighter area in our daily lives, on the contrary. Future might be ahead that is worse than Georger Orwells Big Brother. This time private companies trace us more than the government does, ranging from GSM operators to web search engines, credit card data and survey forms.

In the era of marketing, advertising and consumpiton, it does not matter so much to get data collected about us. The heart of the mattter for the companies is what they could do with those data, how they could increase their sales and forecast future.

Data mining is a method became very popular in 1990s, which aims to reach optimum efficiency in planning and organization thru collecting data from gigantic databases and determining specific trends, allowing to forecast future. Having used artificial intelligence, this method is based on analysing significant data and trends by computers, which takes many years for an ordinary man to collect those data. In the beginning such significant data seem irrelevant, but following computer analysis, it could appear as relevant by comparing two parameters. For example, according a survey run in a supermarket chain, families buying nappies tend to buy beer as well. So, a promotion campaign is held with the concept of Party Time for the Families with Kids.

Why is it so important to connect medicine and insurance, public and private sector, automobile demand graphics with avocado and banana curves? Before answering this question, it would be better to check how such a thing could be possible.

The key concept of data mining is to purge specific data series by sorting and comparing among gigantic databases. Despite Merge and Purge and Database Enrichment methods remained out of fashion as compared to data mining, data could be really transformed into valuable information and automized easily.

It is not easy to set up such huge databases. Many legal and illegal companies and people appeared to collect databases, especially e-mails currently. Metromail is one of the largest companies collecting mail addresses, currently collecting and selling e-mails, established in 1948, hiring 3000 people with a sales turnover of over USD 281 million. It hunts data researching from different resources ranging from state records to surveys, which also include income, householding, marital status, age groups and even the team supported. So Metromail is the no 1 company as required specific name-address info. On the other hand, it has a gigantic database continously developing with data about almost every house in the USA . In addition to such legal companies, there are also pirate ones producing data for pirate CDs.

Cookies innocently embedded in our computers, security cameras tracing us on the streets, retina scanners at airports, mobile phone call centers recording what we said for us, machines recording what we wrote and tools registering our actionsIt is a world that do not care about us, but our data.

There is a new possible future ahead in case there is not a social consciousness formed to pass the overseas laws protecting invidual privacy. That future is profitable for companies, secure for states but nightmarish for us, ordinary people.

Emre Kizilkaya is a journalist. He writes articles for a communication technologies magazine, Tele.com.tr.

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We have all probably experienced mysterious charges appearing on billing statements. When you try to resolve the problem you begin to wonder what the word prompt actually means today. The wonderment continues when you try to extrapolate the meaning of the word absolute in reference to privacy policies and YOUR account. Confusion and haze encircle the brains gray matter and things get murkier. When you try to shake it off, you learn that hackers are not only operating on the outside of business, but on the inside.

Dealing with bogus charges is like being on a wagon train and having to create a circle when under attack by the locals. Back then the enemy was Indians. Now the enemy is hackers. Hackers come in all shapes and sizes, and today they include berserk businesses and their billing departments. The weapon of choice is Money. You dont have any and they do, and they dont care how they get more.

Havent we all thought our account and all the information in our account was private? Well it is, all right, but only the business holding the account can do what they will with it, not you.

Things continue to mutate over time. Since the r has disappeared from the word prompt when it comes to dealing with a billing problem getting prompt attention has turned into p ompt attention (pomp ed). The meaning of which is self importance but its no longer a noun. It is part of the business as usual routine. Its what they do. They continue to practice and preen, their self-importance. at the expense of the consumer. In the past, protocol suggested that whats mine is mine and only I could access it and make changes. Now accounts are just not safe. We cannot change them or access them.

It used to be only the owner of the account was granted authority to the information on the account including billing and payment thereof, changes or access in any way. It used to be the owner of the account had to give written or verbal permission for access to the account in any way, but now AOL can just attach to your phone and charge you, so beware. It is easier for a hacker to access an account than it is for the account owner due to the codes, passwords, and secret ide