Green Eggs & Scam

17 business scams--from telephone trickery to Web wrongdoing--to avoid at all costs

Something smelled fishy to George Sarris. When the 49-year-old owner of The Fish Market Restaurant in Birmingham, Alabama, opened a letter from a disgruntled customer demanding a $6.89 refund, his gut told him to check it out. He didn't recall the customer and, after a few phone calls, realized that the author of the letter was nowhere to be found. Then, Sarris started hearing that similar letters were popping up in eateries all over town. In fact, the same "customer" who had written to Sarris had blanketed other area restaurants with demands for refunds.

"He didn't ask for a lot of money, so some people would probably send it, no questions asked," says Sarris. "If he sent out 1,000 letters and got half back, that's over $3,000."

Sarris is just one of thousands of entrepreneurs targeted by scam artists each year. In fact, the Association of Certified Fraud Examiners estimates that fraud, ranging from bogus billing and dishonest direct mail to sales scams, costs U.S. businesses more than $400 billion annually. Shirley Rooker, president of Call for Action Inc., a nonprofit scam-busting organization in Bethesda, Maryland, thinks more businesses need to take the problem seriously.

"I don't think businesses think in terms of being victims of fraud," Rooker says. You must be aware that scam artists are threatening businesses like yours, often preying on employees who may be less likely than you to question their smooth-as-ice approach. Warns Rooker, "Often, the weak point is the person answering the phone who unknowingly gives out information."

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Gwen Moran is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).

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This article was originally published in the January 2002 print edition of Entrepreneur with the headline: Green Eggs & Scam.

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