Some Scam Artists Target Businesses


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Small business owners often pride themselves on being good judges of character, with a nose for nonsense. Most would claim to be savvy about making purchasing decisions. Sadly, that is not always the case. Better Business Bureaus routinely field complaints from business owners, managers and accountants who have fallen prey to scam artists. They may have been too distracted to thoroughly investigate the offer, perhaps they were too eager to take advantage of a bargain price, or maybe they hadn't taken the time to train their staff about careful bill-paying procedures.

A quick review of recent incidents reported to BBBs can serve as a reminder for business owners everywhere. Always check out unknown companies or questionable offers with the BBB!

Labor Poster Solicitations: Businesses in Tennessee received mailings from an organization using a government sound-alike name. The mailing warned that businesses are required by federal and state law to post notices to employees explaining certain employee rights, and that failure to do so could result in being assessed up to $7,000 in criminal penalties. The mailing stated that the necessary posters could be purchased at prices ranging from $24.75 for a federal poster to $49.50 for a state poster.

    BBB Advice: Do not be misled by organizations or businesses with government-like names or seals. As BBB/Nashville advised inquirers, there is not need to pay a fee to obtain the required posters. These posters are available free of charge from the Tennessee Department of Labor and the Equal Employment Opportunity Commission.

Phony Invoices: Businesses have complained to the Kansas City BBB about invoices they received for "solid waste consulting fees." The invoice amounts ranged from $279.50 to $8,359 for waste hauling or disposal services. The companies billed claimed they had requested no such services. When contacted by the BBB, an attorney for the business called the mailing a "solicitation" for services.

    BBB Advice: It is against U.S. Postal Service regulations to mail a bill or invoice that is actually a solicitation, unless it bears a clear disclaimer that such unsolicited invoice is for information only and not a request to pay. The best protection against phony invoices is knowledge and vigilance. Businesses should alert their bill-payers to be on the lookout for disguised solicitations; carefully review invoices from companies with which they do not normally do business; establish effective internal controls for the payment of invoices, and verify all invoices with the person who gave authorization.

Business Advertising: A company sold advertising to local restaurants and pizza parlors, claiming that the ads would be printed on the plastic card-keys used in hotel/motel door locks and in cable channel listings and area guides placed in hotel/motel rooms. Restaurant owners throughout the Pacific Northwest complained to the Tucson BBB that they paid upwards of $5,000 to have their restaurant featured on the keys and in-room advertising. The advertising was never delivered.

    BBB Advice: Businesses should ask that all advertising propositions be made in writing. Ask for a list of satisfied clients, contact them for feedback, and ask to review copies of their advertisements. Check out the marketplace record of the business selling the advertisements with the BBB.

Help the Local Sports Team: A business in Corpus Christi, TX was set to cut a $10,000 check for an advertisement it had been told would support the local baseball franchise. The business owner had been assured the advertisement would appear in the official publication of the ball club, and had a copy of the advertisement proof, with the sports logo, in hand. On a whim, he decided to call the baseball team directly. Turns out, the sports team knew nothing about the business selling the advertisements, and the publication was not theirs.

    BBB Advice: Businesses do get misled at times by scammers falsely claiming to sell advertisements that will benefit local charities, nonprofit organizations, schools or sports teams. BBBs recommend that the business contact the organization directly to find out if they are aware of the ads being sold, and, if they will in fact derive financial benefit from the advertisement. Also, contact the BBB for a report on any unknown business or organization.
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