Overbilling
Overbilling refers to charging clients for work not undertaken.
Following controversy in 2004 over the billing practices of Fleishman-Hillard (F-H) on its account with the Los Angeles Department of Water and Power, a posting to the subscriber-only PR trade publication, O'Dwyers PR Daily, argued that overbilling was common within the industry.
An anonymous contributor, "Ex-Agency", wrote that "this is the dirtiest of dirty little secrets in the agency business and what's really troubling is it is far from a new trend."
"I worked for one of the top agencies 20 years ago and overbilling was the ONLY way my GM could make his numbers (and that was when times were flush for the industry). The problem in the business is systemic and it's disingenuous for any agency CEO not to admit that overall client service quality has slipped, clients (especially government clients) are more savvy, the PR boutiques are grabbing business the big guys once took for granted, and the holding companies are demanding bigger and bigger pieces of the profit pie from their operations. Small wonder a GM has to resort to fudging the bills," they wrote.
Amidst the controversy over F-H's billing practices, the Public Relations Society of America sent an email to its members stating that billing for work that wasn't performed is "unethical and weakens the public's trust in the PR profession and individual practitioners." [1]
McGill Associates and Dallas Area Rapid Transit
In February 2005, PR Week reported that a Dallas-based PR and advertising agency McGill Associates appeared to have shut up shop. In January 2005 John McGill, who had founded the agency, was "charged with running a kickback scheme that netted him and a corrupt city transit official nearly $350,000".[2]
"In 2000, McGill Associates landed a four-year, $4.4 million advertising contract with Dallas Area Rapid Transit (DART). Prosecutors say that McGill worked together with former DART AVP Micah Causey to bill the transit agency for work that was never performed, and divide the subsequent payments between themselves," PR Week reported.
Other SourceWatch resources
- Fleishman-Hillard
- Fleishman-Hillard & the controversy on overbilling the Los Angeles Department of Water and Power
External links
- "Graham outlines F-H reforms", O'Dwyers PR Daily, July 29, 2004. (The posting was in response to this story).
- "PRSA warns members on billing", O'Dwyers PR Daily, July 20, 2004.
- Jim Edwards, "Ogilvy & Mather Trial To Begin", Brandweek.com, January 28, 2005.
- Hamilton Nolan, "McGill Associates appears to have closed in wake of indictment", PR Week, February 3, 2005.
- Beth Herskovits, "Conviction of O&M execs prompts billing concerns", PR Week, February 28, 2005. (Sub req'd).
- Douglas J. Wood, "Top of Mind: Graft: A Nightmare On Madison Avenue", Brandweek.com, June 27, 2005.
