1. Wasting time: dishonest reporting and ignoring actual incidents, yeah you gain no points and will soon be barred from the service (if that's the right word) but never underestimate the deviousness of the bored and indirect mind.
2. Cheating to earn points, and money: this would depend on location and the number of 'alerts' you are allowed but multiplied by x amount of people it could be an amusing problem, but, could it be possible to get some accomplices to go round to whatever your watching, masked-up and spray graffiti, they run away never to be seen again, except on some 'comedy' TV, and you 'honestly' report it and gain points and get to compete in a shoot-out for best nark and win money. Yea, I think so, and it would make TV fodder, to.
Finally though I'm left with the dystopian picture of a disenfranchised people autonomously clicking ALERT all day every day, alone in their box-like cells while all around them society disintegrates. Oh well, what's the saying? "We're all in this together"!