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Attorney General Mike DeWine
DeWine Warns of
Scams Targeting Small Businesses
Average Reported Loss is About $2,000
(COLUMBUS, Ohio)—Ohio Attorney General Mike DeWine today warned small
businesses to watch for signs of a scam, including callers who claim
the business’s power will be shut off and invoices for products the
business never ordered. The warning comes during National Small
Business Week, May 4 to 8, 2015.
In the past year, the Ohio Attorney General’s Office has received more
than 150 complaints about potential scams affecting businesses, with an
average payment amount of about $2,000.
“Small businesses work incredibly hard to keep their operations
running, and they can be hit hard by scams,” Attorney General DeWine
said. “We don’t want business owners to lose valuable time or money to
con artists, so we are encouraging them to learn about common scams and
to talk to their employees about the warning signs.”
Common schemes reported by businesses include:
Utility shut-off scams: A business receives a call
supposedly from its utility company claiming the business’s power will
be shut off within hours unless the business pays a few hundred dollars
immediately using a prepaid money card. In reality, the caller is a
scammer, not a representative of the utility company and the business
will lose any money that it sends. This scam often affects restaurants
and other businesses that have a physical location where customers
visit, such as convenience stores, bowling alleys, or nail salons.
Phony invoices: Businesses receive a fax, phone
call, or letter demanding that they pay a final invoice for “yellow
page” advertising, office supplies, or other products that the business
did not actually order. (Scammers rely on employees not realizing the
invoice is phony or paying it to avoid trouble.)
Corporate minutes filing: Businesses receive notice
that they must submit information to file their annual corporate
minutes along with a fee of $100 or more. Although some businesses
report thinking the notice is coming from the government, it is not.
Businesses generally are not required to make this kind of filing with
the state.
Overpayment scam: A scam artist, posing as a
customer, places an order but pays more than the total amount — such as
sending a $400 check after ordering $200 worth of products. The
“customer” asks the business to send back the difference via wire
transfer or prepaid money card. While the business’s payment is valid,
the customer’s is not, and the customer’s check later will be returned
as counterfeit. This scheme often affects independent sales consultants
who sell cosmetics or household goods directly to consumers.
Online sales scams: A business finds a good deal on
a copy machine, vehicle, or other equipment from an online seller who
advertises on Craigslist or other Internet marketplaces. The business
sends the payment but never receives the product.
Red flags of a scam include:
Callers who threaten to shut off power within hours
unless payment is made.
Bills or invoices that arrive unexpectedly, not
according to schedule.
Unexpected calls asking to “verify” the business’s
address or contact information.
Requests for payment via wire transfer or prepaid
cards, which are preferred payment methods for scammers.
Overpayment from a customer.
Demands for immediate action (and threats about what
will happen if no action is taken).
Steps to avoid scams:
Demand information in writing before sending any
payment.
Don’t trust someone who says you must pay using a
prepaid money card or wire transfer. Once money is sent using one of
these payment methods, it is nearly impossible to recover.
Warn employees about potential scams, and encourage
them to talk to a supervisor if they notice any unusual calls,
invoices, or customer activity.
To help businesses avoid deceptive behavior, Attorney General DeWine’s
office provides an informal dispute resolution process that helps small
businesses and nonprofits resolve complaints against other businesses.
In 2014, the office received 1,179 complaints and helped adjust,
recover, or save almost $77,000 for small businesses and nonprofits,
according to complaint information.
Businesses or consumers who suspect a scam or unfair business practice
should contact the Ohio Attorney General’s Office at
www.OhioAttorneyGeneral.gov or 800-282-0515.
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