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News

AGMA to raise awareness of growing problem of service abuse

AGMA (Alliance For Gray Market And Counterfeit Abatement) : 02 June, 2009  (Company News)
Using IT services without entitlement is seen as a growing problem and a significant threat to IT service providers and channel partners, according to AGMA
The Alliance for Gray Market and Counterfeit Abatement (AGMA), a non-profit organisation dedicated to addressing the gray marketing and counterfeiting of technology products around the globe, is continuing its efforts to raise awareness through sponsoring studies and quarterly meetings.


AGMA warns Information Technology (IT) OEMs and the channel of the dangers posed by service abuse, a relatively unknown issue that is a growing problem for the IT sector. Service abuse is defined as the use of services and support without proper entitlement or authorization including, actual equipment replacement, technical support and/or software without proper warranty or entitlement contract - generally with the intention to benefit from defrauding the provider. In other words, service abuse is service usage by a party that is not entitled to receive the service. For example, use of Return Merchandise Authorization (RMA) service or receiving support on products that are not under warranty or covered under a service agreement/entitlement is classified as service abuse.

"Service abuse is a large and growing global problem that is disruptive to businesses and is perpetrated by increasingly innovative means," noted AGMA president Ram Manchi. "This has a significant financial impact on the IT industry. The consequences of service abuse can include degradation of customer confidence and company reputation, increased operating costs, loss of service revenue, increased gray market activity, loss of new product sales, and increased R&D costs."

Currently, service abuse is not an issue that is considered to be a prominent one by the IT industry. AGMA is concerned that this growing threat may be flying under the radar for many companies. In an effort to raise awareness, as well as offer strategies, programs and effective processes to help address the problem, AGMA is working with PricewaterhouseCoopers to study this issue for the IT industry. AGMA welcomes participation in a survey related to the topic of service abuse. The results of the survey will be published this summer. To participate in the AGMA sponsored survey, please contact Jonathan Kurtz of PricewaterhouseCoopers.


On May 14, AGMA held a meeting of its European chapter, hosted by Cisco in London. The focus of this meeting was to provide an open forum to discuss trends, issues and intellectual property protection. The topics of the day included end user verification, leveraging contracts to strengthen terms and procedures, parallel imports, and the benefits of partnering with the World Customs Organization. AGMA members in attendance learned that registering their trademarks with customs is a free, effective resource to protect brand owners' intellectual property rights. Along with leveraging contracts to cover tracking, audits and warranties, AGMA members discussed effective best practices and current European Union regulations to combat parallel imports.

AGMA uses a variety of avenues to raise awareness and encourage positive change in the marketplace including, event speaking, educational initiatives, benchmark studies, whitepapers, industry guidelines, and, as appropriate, public policy advocacy in areas like law enforcement and customs.

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