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Dealing with business scams

A lot of businesses are targeted for rip-offs or scams.

Scam merchants rely on the fact that you're very busy and will give them the information they ask for without thinking about it.

This may include information such as invoice numbers that they need to carry out their fraudulent activities. The Office of Fair Trading and the Police have encountered a wide variety of business scams over the years.

Types of scams
The most common scams occur over the telephone. This keeps the con artist anonymous and allows them to hang-up if the victim starts to question them too much. Phone scams are commonly known as ‘blowing’ or telefraud. Some of the types of telefraud scams are:

• Other Partner Plot - where you are told the deal was approved by your partner (or other staff member), whose name would have been obtained by an earlier phone call from the con artist. This person will conveniently not be around to confirm it. Usually there is some urgency to conclude the transaction before they return. 
• Personal Friend Fraud - the fraudster poses as someone you have met before and with whom you had entered a verbal agreement. Any uncertainty you feel may be countered by the provision of personal details seemingly only a friend could know.
• Listings Lurk - you are asked to place an advertisement in a great new directory that has a fantastic market reach. Or perhaps the publication is promoted under the guise of a charitable/community organisation whereby you are emotionally drawn into parting with your money. The reality turns out to be a nonexistent publication or a publication with a very low circulation.
• Order Number Operation – a regular supplier may ring requesting an order that was placed by your company some time ago. As your paperwork is a mess and it's a company you have dealt with in the past, you give a new order number.
• Government Gang-up – a supposed representative from a Government department such as the Australian Tax Office may ring demanding money you allegedly owe and make you fear the consequences of saying no.

 Examples of scams
A shocking bill- The Office of Fair Trading received numerous complaints about an electrical contractor who had sent invoices to medium-sized companies demanding payment for the installation of power points and rewiring. Upon further investigation, it was revealed that this work had neither been authorised by, nor carried out for any of the companies in question. The companies were advised not to pay. For those who already had, the Office took steps to obtain refunds. The contractor was subsequently prosecuted.

Suspicious overseas deals - Scams frequently cross national boundaries so business owners also need to be on the alert for suspect deals offered by overseas organisations. In one scheme, people claiming to be representatives of the Nigerian Government targeted firms with the proposal of depositing money into their bank accounts. In return for allowing use of that account, the firm was supposed to receive a substantial share of the funds.

To take part in the deal, the business was required to supply blank copies of its letterhead, a stamped and signed invoice and bank account details. However just before they received their share of the funds, business owners were asked for a ‘tax’ or cash to cover their last minute expenses or bribes. The businesses lost that money, ranging from $250,000 to more than $1 million and never received their promised share of the other money.

You may be asking yourself, how do these people know so much about me?

Well, a lot of information you may consider personal is actually public knowledge. Details such as address, family relationships, and date of birth can be discovered through the electoral roll, mail order lists and telephone listings.

Con artists may ring around your birthday to wish you a happy birthday pretending to be a long lost friend, then turn the conversation to extracting money.

Protecting yourself
Scam merchants and con artists thrive on uncertainty. Poorly organised businesses are the main targets for scammers. It is easier to make claims about transactions if the caller knows you have no written confirmation at hand. Keeping proper records and insisting on written confirmation of transactions will not only minimise scams, it also makes good business sense.The following tips can help you avoid scams.

Always:

• double-check all advertising
•  » check that a person is who they say they are by looking up his or her organisation in the phone book and asking to speak to that person
•  » keep clear records of what has been authorised, and insist on written confirmation of transactions
•  » carefully check any documents that appear to be summonses or other legal papers to make sure they are genuine
  

• » seek professional help (accountant/solicitor) if significant money, time or responsibilities are Involved
• » ask for another copy of your authorisation or order if you are unable to find it yourself 
• check the circulation of a magazine if possible. Most mainstream  publications are audited by the Circulation Audit Board. To confirm the circulation of a publication ring 9954 9800.

Never:

• » give out any information about your business unless you know what that information is being used for (including christian names of other staff members)
• » agree to anything on the phone – instead, ask for an offer in writing
• » use birth dates for order numbers – con artists will use them for other scams or pass them on to others
  » have an inappropriate number of people authorised to pay cheques.
  » Keep the number to a minimum and maintain a tight control over them.”