Latest Business Scams

SMALL & MEDIUM BUSINESSES

BE EXTRA VIGILANT TO AVOID BEING CAUGHT OUT BY SCAMMERS !

The Department of Enterprise, Trade and Investment’s Trading Standards Service (TSS) has urged small and medium businesses to be extra vigilant to avoid being caught out by scammers, following an alarming increase in complaints from businesses being targeted by fraudsters.

Damien Doherty, Area Inspector for Trading Standards said: “While most of us think of scams as crimes against consumers, we tend to forget that businesses can fall victims to the rogues and conmen just as easily.

“Scamming businesses, both large and small, can be so profitable that many scammers now concentrate solely on targeting the business sector. Scams are a multi-million pound industry and businesses are often viewed as easy-pickings.”

TSS has recently received a number of complaints from small businesses in the Larne area that have been misled into paying for advertising.

Mr Maurice McIlroy, is one local businessman who fell victim of the scam. He explained: “I was contacted by the sales representative of an English-based company who produce and sell advertising space in menus for a local Chinese restaurant.

“I was informed that 40,000 menus would be distributed throughout the Larne area over a two year period via the restaurant and by mail drop. I agreed to place an advert at a cost of £416 per annum and paid a deposit.

“As part of the deal, I was also informed that I could get discount up to the value of the ad at the Chinese restaurant over the two year period. This suited us as we often used the restaurant for group functions.”

When Mr McIlroy contacted the Chinese restaurant to use the discount he was told that they were not aware of the promised offer. He also discovered that the actual number of menus distributed was significantly lower than had been agreed, as the restaurant had received less than 3,000 menus over the past year.

Mr McIlroy said “I tried to cancel the contract but have been told that I am unable to do so. I feel that I was totally misled and I would like to warn other businesses to be on their guard and not to fall for this con. I immediately cancelled my credit card to avoid any further payments being taken.”

Scams are becoming increasingly well planned, well thought out and plausible and they can take the form of letters, emails, faxes, telephone calls and text messages.

Damien Doherty commented: “We see examples, on almost a daily basis, in which small businesses hand over money to the scammers without researching the service being offered, or finding out details about the company they are dealing with. Unfortunately by the time the matter is reported to Trading Standards the scammers have disappeared and it’s too late to get any money back.”

Businesses can help protect themselves by making sure that staff know how to spot a scam and how to avoid being scammed.

TSS offer the following advice to business owners:

Have a limited number of authorised employees to approve purchases of goods and services, and ensure all other employees know that they can't discuss ordering or payments.
Agree to nothing from a phone call. A legitimate company will be happy to put everything in writing. Sign nothing until you've reviewed the contract and the small print in detail.
Ask questions. Find out how they got your details; ask for their phone number and address. Establish what it is they are asking you to sign up to. Research the goods or service being offered.
Should you receive an invoice for a listing you don't believe you've ordered, write back saying so and keep a copy of the letter.

So what should you do if you spot a scam?

If in doubt, don’t reply. Instead, bin it, delete it or hang up. If your business is the victim of a scam, or has information about a suspected scam, you can report it to Consumerline, the Department of Enterprise, Trade and Investment’s consumer advice helpline.

Examples of common types of business scams are:

Business Directory Scam

The pitch - Businesses receive a form via the post, email, or fax appearing to offer a 'free' listing or asking if you wish to continue being included in a hard copy or online business directory. You may be asked to check the details about your business, or be informed that an employee of yours has requested the form. You will be told to return the form even if you don't want to place an order.

The con - In the small print it will state that by signing the form you are committing to an order. If you sign and return the form you are agreeing to pay for ongoing entries in the directory, costing anywhere between £100-£1,000 per annum. In many cases, whatever they say they will be producing either never gets published, or in such small quantities that it is of no use. The publisher may also try to enforce this debt by sending threatening 'debt collection' letters.

Charity Scams

The pitch - A telesales agent will call and ask if you want to place an advertisement in a publication for a seemingly good cause. The caller will give you the impression that the publisher is affiliated with local charities, emergency services, crime prevention and community health initiatives.

The con – The scammers associate themselves with a good cause to encourage you to place an order. Again, whatever they say they'll be producing either never gets published, or in such small quantities that it's of no use. Furthermore, the caller may also record the phone call and carefully word what they say to sound like you are agreeing to place an advertisement, even if you have just requested further information.

Office Supply Scams

The pitch - Typically a telemarketer will call your business to discuss any office supplies you might need on a regular basis such as office stationery or printing cartridges.

The con - The caller will mislead you or your employees into thinking that an order for office supplies has already been placed by your business. You will then be sent and invoiced for unwanted and often overpriced stationery, photocopying toner or other office supplies. When you try to return the goods you will be told that you are not able to because you signed the order form or agreed to the goods on the telephone.

Yellow Pages and Domain name renewal scams

The pitch - You could be sent a letter that looks like a renewal notice for either Yellow Pages or your domain name.

The con - Although the letter specifies renewal of your current advertisement or domain name it will be from a bogus company attempting to look like the legitimate business.

Other Useful Links

ACG www.a-cg.org

(the Anti-Counterfeiting Group)

BPI www.bpi.co.uk

(The British Recorded Music Industry)

Consumer line www.consumerline.org

(Consumer advice, information and consumer rights)

Crimestoppers www.crimestoppers-uk.org

DIAGEO www.diageo.com

FACT www.fact-uk.org.uk

(The Federation Against Copyright Theft)

Get Safe Online www.getsafeonline.org