December 23, 2024
Column

Business to business scams a threat for small operations

Most of the time this column reports about individuals who have had difficulties in doing business with various entities, be they telephone, internet, mail-order, or face-to-face transactions. But poor business practices or outright scams between businesses is a frequent challenge to the business left holding the bag.

Northeast CONTACT has more than 600 individual and 100 business members, and as CONTACT caseworkers often repeat, “Businesses are consumers too!”

Here are a few common business issues :

. Phony business invoice scam: Criminal perpetrators of this scam have been around for many years. It does not focus on the dreams, hopes, or greed of small business owners; it preys on their inattentiveness. The scam principle is as simple as it is diabolical. Send a company an invoice for goods or services never provided and hope the inattentive business pays the bill. Sometimes in very, very fine print, there is a disclaimer that this is, indeed, a solicitation, not a bill. At other times, there is no fine print, it is total fraud and deception. These invoices tend to center around telephone directory listings, website service providers and hosting services, even membership fees.

One trick of this evil trade is to use logos and names almost identical to a bona fide, well known company. Often accounts payable staff think they are paying for a legitimate service, but alas, they are cutting a payment check to a scammer. The best remedy for this situation is for the responsible staff to pay close attention and read carefully all invoices received. If there is any doubt, call the company, if possible, or write them a letter. Check with groups such as Northeast CONTACT or the State’s Attorney General’s office, or perhaps “Google” them online. If there are problems with a company and other firms have been victimized, most likely there will be some reference online to this reprehensible practice.

. Telephone and fax scams: Since the invention of the fax machine, the bad guys have been using it as another means of soliciting or scamming businesses. The use of the telephone by hucksters to sell phony photocopier toner is well known but still finds victims. Unsolicited ads that are faxed are illegal under FCC regulations.

Recently, unsolicited faxes have been sent out that purport to help you sell your company. The ads offer to conduct an on-site evaluation of your business and then to connect you with interested buyers around the world. There are large fees associated with this service to be paid in advance. Payments have been made and no service or onsite evaluation is ever performed. The company has been scammed.

. Poor goods or service: Many businesses face the same challenges that individuals face. They receive poor quality goods or services. Northeast CONTACT recently assisted an area municipality that purchased a new piece of expensive firefighting equipment that was a lemon and did not provide the dependability required. These situations are common in the business world.

Often an outside organization or service is better equipped to get satisfaction than the company itself. In small companies, staff time and associated financial resources are usually very limited. Many firms will cut their losses simply because they do not have the time or money required to get satisfaction with a problem. Negotiation and mediation services often can be a solution to these problems

. Customer service and employee thefts: Not all customers play fairly and honestly. There are employees who do steal from their employers. On the national scene last week, Coca Cola employees were trying to sell the company’s new product secrets to Pepsi. Customer service desks see individuals trying to return merchandise to receive cash for items they did not buy. Shoplifting by employees or customers continues to take a large bite out of a company’s bottom line. Staff training and employee screening can help reduce losses.

Companies that can successfully sidestep some of these business-to-business pitfalls often live to become larger entities. Those firms that fail to thwart those individuals and businesses that are trying to take advantage, steal, or scam them often quickly fade to extinction and memory.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast Contact for Better Business Inc., Maine’s membership-funded, nonprofit organization and America’s oldest consumer advocacy agency of its kind, established in 1972. For help, write to Consumer Forum, Bangor Daily News, P.O. Box 1329, Bangor 04402-1329, or e-mail consumerhelp@bangordailynews.net.


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