Protecting Your Business From Fraud | Federal Trade Commission
Hi, I’m Todd Kossow, an attorney at the Federal Trade Commission, and I’d like to talk to you about protecting your business from fraud. Have you ever gotten a bill for products or services you didn’t order? You know, con artists try to fool businesses, non-profit organizations, even church offices into paying for office supplies, business directory listings, or Internet services they haven’t ordered. Sometimes, they send you business directories or office supplies out of the blue. They might send you an invoice for products you didn’t order, and they didn’t deliver. Products like toner, paper towels, or light bulbs. Or they might send you a lower quality product and charge a higher price than you normally pay. Their hope is that you’ll pay the bill without asking any questions. And if you don’t, they may threaten to take you to court or turn the bill over to a collection agency, and ruin your credit. In another variation on the scam, fraudulent telemarketers place cold calls to offices, asking the employee who answers to “confirm” the business address, phone number or web address. Then they hit the employee with a rapid-fire pitch. Later, if you refuse to pay because you didn’t order anything from them, they play a recording of the call that they’ve manipulated, claiming that it’s proof that your employee placed the order. At this point, some businesses pay just to stop the hounding. But if you do, you could be targeted for other scams. So what can you do to protect your business from office supply scams? Follow these four steps: First, know your rights. If you get supplies or a bill for services you didn’t order, don’t pay. And don’t return the goods. It’s your right under the law to treat merchandise you didn’t order as a gift. In short, it’s yours to keep. Second, train your staff. Talk to your receptionist, and everyone in your office who might answer the phone, including volunteers about how these scams work. Designate one person to handle everyday expenses like office supplies, directory listings, and Internet services even in a small shop or office. That person will know who your authorized vendors are, and will be able to spot the would-be scammers. Advise employees who aren’t authorized to order supplies or services to say so. And tell them who they should refer the calls to. Third, read your invoices. Inspect your invoices and documentation to make sure you pay only for merchandise or services your company ordered and received. Consider authorizing a small group of employees to approve purchases and pay the bills — or using a purchase order system or special software. And finally, report fraud. If you’re getting bogus bills, speak up. File a complaint with the Federal Trade Commission at ftc.gov/complaint or by calling 1-877-FTC-HELP. To learn more about protecting your business from fraud, visit the Business Center at business.ftc.gov.