Green Eggs & Scam

Government Document Dupes

In this scam, you receive an official-looking document that leads you to believe you must purchase signage, such as minimum wage declarations, and display it by law. But in most cases, signage that's mandated by law is available for free from the government. In another twist, the BBB confirms that a number of Alabama-based restaurants received demands from the "Environmental Protection Enforcement Agency" to fill out a lengthy questionnaire and return it with a fee of $189 or risk being fined $5,000 per day. If you get an official-looking document demanding money, call the state or federal agency referenced in the document to verify the demand is valid.

Phony Customer Con: This is the scam mentioned earlier in Sarris' story. Here, a scamster sends a letter posing as a disgruntled customer and demands a refund for a nominal amount. Because the amount is so small, many business owners send it without question. To avoid being ripped off, follow up on such requests with a call to verify that the customer is real or ask the customer to send a copy of the receipt.

Business Identity Theft: Immediately following the World Trade Center disaster, hundreds of thousands of confidential papers were strewn about the streets of Manhattan, many from brokerage firms and other places of business that house sensitive information. If this information were to get into the wrong hands, some of it could be used in identity theft scams against both businesses and individuals.

Recently, Rooker met a pet shop owner who found suspicious charges on her company credit card. Soon, she realized that someone had deceptively obtained credit cards and borrowed money in her company's name. You should closely monitor bills and watch for erroneous charges. On a daily basis, follow basic precautions to guard against identity theft, including destroying business credit offers before discarding them. Safeguard important information such as tax identification and bank account numbers, and watch for change of address notices from credit companies or other vendors.

Energy Shocking: Similar to phone service "slamming," shocking is the practice of switching energy service without permission in states where energy deregulation allows for a variety of service providers. The BBB advises that companies check their bills monthly for irregularities to safeguard their power sources.

Copier Service Scheme: In this brazen scam, the con artist poses as a service technician for your office equipment. Once he gains access to your copier or other expensive machinery, he then substitutes an inferior machine or steals the office equipment altogether. Always ask service technicians for identification, and if they show up unannounced, call your provider to double-check identity.

"Cash a Check, Get a Bill" Con: In this scenario, businesses receive nominal checks in the mail resembling rebates or refunds. However, the check has fine print that says cashing it authorizes the issuer to bill the business for a product or service, change long-distance carriers and so on. Review all checks and their point of origin. If it seems suspicious, don't cash it.

Damage Control
Once you've been scammed, you have several options, says David Lenci, an attorney with Preston Gates & Ellis LLP in Seattle. Your state's attorney general's office or your local law enforcement agency may have an unfair trade practices group.

"These agencies may take action on your behalf, especially if the scam is widespread," says Lenci. He adds that, depending on the cost of the scam, you may choose to file suit on your own. Federal authorities, such as the FTC, U.S. Postal Service or FCC, may also be able to help, depending on the nature of the scam. Watchdog groups and nonprofit scam-busting organizations can also assist by providing information and advising a course of action.

Regardless of whether you fall for a scam, it's important to report it. Says Frank Gorman, an attorney with the FTC, "[The FTC] houses a database of scams that helps law enforcement officials determine how widespread a particular scam may be and whether or not the FTC or other agency will file suit."

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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