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BBB Warns Small Business Owners to Beware of Telephone Relay Fraud
April 22, 2009

BBB Warns Small Business Owners to Beware of Telephone Relay Fraud

Central Alabama – April 22, 2009 - Better Business Bureau warns small business owners that reports of scammers plying their trade through telephone relay services — typically used by the hearing impaired to make phone calls — are cropping up all across the country. At a time when businesses literally can’t afford to fall victim to fraud, this scam is experiencing a comeback and small business owners should take precautions to avoid losing thousands of dollars.

BBB has received reports from many types of businesses that received suspicious orders through TTY or telephone relay services. These services are meant to assist the hearing impaired in making telephone calls and often rely on an operator who relays a typed message from the caller to the business. Because, by law, the operator is not allowed to disclose the origin of the call, this service allows the scammers to hide their identity.

“With many small businesses struggling to stay afloat in these tough economic times, the old adage ‘buyer beware’ only addresses half the issue, because we’re seeing increasingly that sellers need to beware as well,” said David Smitherman, BBB President/CEO. “The use of telephone relay services to scam small businesses isn’t new, but is seeing a comeback, which is why owners need to know the warning signs or risk becoming the next victim.”

The scam being employed over telephone relay is a variation on an overpayment scam. A business receives an order from a customer over the phone through a telephone relay service. The customer will explain that the delivery service they’d like to use won’t take credit cards and asks that the business wire money to the shipper and simply tack the cost onto the overall order and charge their credit card for the total amount. Any money wired to the supposed shipper, will actually end up in the hands of the customer/scammer and the credit card number provided is stolen. Not only does the business suffer the loss of the goods or services ordered by the scammer, it will also lose whatever money was wired to the phony delivery service.

Businesses that are being targeted by this scam vary. BBB has heard from caterers and restaurants in Washington and Idaho, transmission shops in Tennessee, and awning companies in Colorado, who all received calls from scammers using relay services in the last couple months.

One example comes from the BBB Serving Central Georgia which recently received a call from a glass company that unfortunately fell victim to this scam. Over a telephone relay, the scammer made a special order for $4,000 worth of glass. The company ordered the glass from the manufacturer but became suspicious when the customer requested that the glass company wire payment to a shipper after deducting the amount from the credit card number provided. The glass company was able to track down the real owner of the credit card who didn’t even realize their number had been stolen. Luckily the glass company did not wire any money to the shipper—which was actually the scammers—however, the company was out the $4,000 spent on the glass.

BBB offers the following advice to business owners to help identify fraud over telephone relay services:

  • If the customer is using a TTY Relay Operator ask the customer for his/her full name, address and telephone number.

  • Ask the customer to provide the name of the issuing bank and its toll-free customer service number as printed on the back of all credit cards.

  • Ask the customer for the three or four digit Card Verification Code that is found near the account number on the back or front of a credit card.

  • Tell the customer that you will check with the bank and call them back. When you do that, keep good notes. Verify all information the customer provides. If a customer objects, explain that these procedures are for their protection, as well.

  • If the customer still objects to providing any of the above information, abandon the conversation and advise that you are not prepared to do business this way.

For more information on this and other scams targeting small business owners, visit BBB online at www.bbb.org.

About BBB Serving Central Alabama & the Wiregrass:
BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Incorporated locally in 1955, today your BBB services 41 counties in Central Alabama, supported by over 3,800 Accredited Businesses. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 125 BBBs serve communities across the U.S. and Canada, evaluating and monitoring nearly 4 million local and national businesses and charities. Please visit www.bbb.org for more information about BBB.