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Better Business Bureau ®
Start With Trust®
Northern Colorado and Wyoming
Daily Dilemma: Is it Legit? Or is it a Fraud?
It’s challenging enough being a business owner or director of a charity without having to instantly – and confidently – tell the difference between a legitimate invoice and a phony one or between a bonafide donation and one that comes with red flags a waving. With that in mind, BBB advises both business owners and charities to beware of the certain scenarios that could be fraudulent.
August 19, 2014

It’s challenging enough being a business owner or director of a charity without having to instantly – and confidently – tell the difference between a legitimate invoice and a phony one or between a bonafide donation and one that comes with red flags a waving.

With that in mind, BBB advises both business owners and charities to beware of the following scenarios that could be fraudulent.

Office Supply Swindle – This happens one of two ways: Fraudsters send out invoices for office supplies like toner or paper that you never ordered or sometimes they send the supplies and then demand payment.  

Overpayment Scams – Be extremely cautious if a customer or donor overpays using a check or credit card and then asks you to wire the extra money back to them or to a third party.

Directory Scams – A perennial problem is that of deceptive directory sales. Commonly the scammer will call the business claiming they want to update the company’s entry in an online directory. The business is later billed hundreds of dollars for listing services they didn’t agree to or for ads they thought would be in a legitimate directory.

Check Cheat - Your business or charity may get something that looks like a refund or rebate check. Read the fine print on the front and back carefully. By cashing the check, you may be agreeing to be billed monthly for something you don’t want or need, like Internet access or a listing in an online directory.

Charity Con - Many businesses make it a point to support worthy causes in the community. So when a group claiming to help firefighters, veterans, police or kids asks a company to buy space in a calendar or publication, you’re happy to chip in. Fraudsters take that money and disappear. Of course, crooks cover their tracks by picking names confusingly similar to reputable charities, so it’s hard for businesses to find out they’ve been had.

What to do? BBB and the Federal Trade Commission advise taking the following steps to protect your company from fraud:

Train your staff. Educate your staff about how these scams work. In addition to your regular receptionist, talk to everyone who may pick up the phone. Put a copy of this article in employee mailboxes. Mention it in a staff meeting. Post it on the break-room bulletin board or where employees clock in and out.

Inspect invoices. Depending on the size and nature of your business or charity, consider implementing a purchase order system to make sure you’re paying only legitimate expenses. At a minimum, designate a small group of staffers with authority to approve purchases and pay the bills. Train employees to send all inquiries to this group. Compile a list of the companies you typically use for directory services, supplies, and other recurring expenses. Encourage the people who pay the bills to develop a “show me” attitude when it comes to unexpected invoices from companies they’re not familiar with, even if those invoices list one of your employee’s names. Don’t pay for products or services you’re not sure you ordered.

Verify to clarify. If you get a message that looks to be from a bank, credit card company or government agency, investigate before responding. Using a phone number you know to be legit, contact the office directly to ask if the inquiry is on the up and up. Furthermore, many business directory scam artists are headquartered in Canada or in other foreign countries, but use post office boxes or mail drops to make it look like they are in the U.S. Before paying, check them out for free at bbb.org.

File a complaint. If a scammer sends you bogus bills, speak up.

  • File a complaint with the FTC at ftc.gov/complaint and with BBB at bbb.org. Complaints help shape the FTC’s law enforcement agenda, so it’s important to sound off when you spot a scam. Concerned about business directory fraudsters’ threats to tarnish your credit if you don’t pay? Many will simply drop the matter — and may even provide a refund — if they know you’ve complained.

  • If you think you’ve been victimized in a fraud scheme that involves the U.S. Mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service.

  • Alert your state Attorney General. You can find contact information at naag.org, or check the blue pages of the phone book under State Government.

Start With Trust. For more consumer tips and information, visit bbb.org.