VOL. 133 | NO. 108 | Wednesday, May 30, 2018
Tips to Halt Small Business Scammers in Their Tracks
One of the oldest, but still popular, scams perpetrated against businesses is the “office supply scam.” Small businesses, nonprofit organizations, schools and other organizations are tricked and even intimidated into paying for supplies they didn’t order.
Telestar Consulting, which did business as United Business Supply and later Kleritec, and its owner paid $7 million to settle Federal Trade Communications charges that they tricked child care centers, schools and police and fire departments into paying for office and cleaning supplies they didn’t order. In announcing the settlement, the FTC noted the valuable assistance the Better Business Bureau of Los Angeles and Silicon Valley provided in its investigation.
The companies offered an initial shipment as free, or a low-cost “good deal,” but didn’t disclose the total cost and terms to organizations that accepted the offer. They sent additional unordered shipments and threatened to refer the organizations to collections if they refused to pay. Scammers often claim to have recordings of employees agreeing to orders, but if such recordings exist at all, they’re usually doctored.
In other cases, scammers have engaged unwitting employees by saying they’re calling to “confirm” an existing order, to “verify” an address, or to offer a “free catalog.”
The FTC and BBB offer the following advice to protect your organization from office supply scams:
Unordered merchandise is yours. If your business receives merchandise no one on your staff ordered, the law says you don’t have to return it and the vendor can’t legally collect on it, even if you used the item before you realized it was unordered.
Your best defense is a trained staff. Spend five minutes at a staff meeting educating your team about the signs of an office supply scam. Caution them about fake friendly callers who worm their way in by claiming to have done business with you before or who say they have an “urgent” need to speak to someone in your maintenance department. For nonprofits, let volunteers know that fraudsters also target charities, churches and community groups.
Consolidate contacts. Office supply scammers try to exploit the fact that small businesses aren’t likely to have purchasing departments. But you can still designate one person to respond to all inquiries about office supplies, “free” offers, or “existing” orders. Putting one person in charge – especially a staffer with a well-calibrated baloney detector – can help protect your company from con artists.
Investigate every invoice. Don’t pay a penny unless you know the bill is for items you or your staff actually authorized. If someone tries to pressure you into paying for unordered merchandise, complain to the FTC or your state attorney general and let the pushy caller know you’re on to him.
Find more information about common small business scams at www.ftc.gov/SmallBusiness.
Randy Hutchinson, president and CEO of the Better Business Bureau of the Mid-South, can be reached at email@example.com