Sometimes a scam is called by other names such as fraud, rip-off, theft, cheating, embezzlement, swindle, con: or even the softer phrase, chicanery; but a rose by any other name … When the term Scam is applied, it adds a new dimension to the crime. Scams often involve intrigue, mystery, intelligence and extensive planning.
Sooner or later, nearly every business will experience some form of scam. Most likely it will happen several times. You
may be taken for a few dollars -or millions according to the size of your business.
Following are descriptions of scams targeted toward business.
THE BUST·OUT is one of the oldest and most popular scams. It is perhaps the one that is most likely to catch your company if you sell in volume to other businesses. The scammer first orders small amounts and pays promptly. Often, credit may be established at larger firms for references. Then, when you accept this new company’s credit, you get that huge order you always dreamed about. It could be for many thousands of dollars. The scammer either plans to file for bankruptcy, or claim insolvency, or just disappears after selling your stuff; and you never get your money for the order.
THE PAY TWICE orders is small time, but effective. An office supply discount company calls your small company and offers great priced office supplies for you to pay for after you receive them. The items are fine and the bill comes in from XAC Office supplies for $79.50 … You’ write the check. A month or two later you receive another bill for $79.50 from ABX Discount Office Services. Your secretary cannot find where she has paid this company, but remembers something about the order. She writes another check to this company. The boss signs it and the company is paid twice, If you catch it, they are not in much trouble anyway.
THE ELECTRONIC TRANSFER is the new high-tech way to steal millions. If your, company is a bank: or other big money handler, you may be at risk. These’ hackers use their computers to break into your system and write money to their own accounts around the world.
THE INVESTOR BROKER offers to help you find a client to supply badly needed funds for your business or he may talk to you about a merger or acquisition. Often, he provides fake names of investors he claims to represent, and then he requires an advance fee of several thousands of dollars to get the ball rolling.
THE STICKY FINGER scam is perfect for the person within your firm who handles the money and writes the checks. When opportunities avail themselves, this employee gives in to the temptation of getting easy money. One ploy often used is that the employee will write checks to fake vendors or seasonal employees, and then cash the checks themselves.
THE CLAIMS ADJUSTER sometimes in collusion with your insurance company, will scam you after you have a major loss that includes the loss of your written insurance policy. The claims adjuster will tell you that there are problems with your policy and will offer to fix them if you pay him a large sum. Threats may be made about investigations for arson. Beware if you are asked to sign a new policy because it may not be comparable to your previous one, or the adjuster may also ask you to sign a letter that contains false statements. These things may sound good, but may cause you not to get any money from the insurance company.
THE CHARITY CHICANERY scam is real sneaky. A phony telefunder, using names of legitimate charities, will call you and ask you to donate money, perhaps in exchange for a prize, and you make a donation. The next step is that they call to expose the phony charity, offer to help you get your money back and request an up-front fee for their efforts. A variation of this is that after getting mailing lists for business people who have donated to legitimate charities, they will call you and pull off the same scam.
THE PHONE CODE THIEF looks over your shoulder to get your phone card code. He may use binoculars to watch you dial your code from a public phone booth. Or, it may be a crooked telephone company inspector who gets his hands on mailing lists. He may call you asking for your identification code to help clear up some confusion about a suspect he thinks may have used your code. In any case, you may end up with charges for phone calls you did not make.
THE NONEXISTENT COMMODITIES SCAM is a scam against banks and countries. One example is a sweet sugar deal gone sour. A self-proclaimed broker of sugar arranges for a country to buy sugar through him below the going market prices. The buyer arranges a letter of credit from a bank payable when proof of shipment arrives. The broker forges documentation and collects the money, but when the ship arrives, no sugar.
THE SCANNER SCAM is where some stores strike back at the customer. Scanners have been added at all kinds of stores. Most
of the time, the price on the product is the price charged at the cash register by the scanner. In a few stores, honest mistakes are made; but in others, a deliberate effort is made to overcharge at the scanner. In these cases, ten to twenty percent of the time, you are overcharged. Most customers don’t check the prices and the store gets, away with it. If you do catch a mistake, they plead that it was an innocent mistake and make the adjustment usually on your bill only, and leave the, error in the scanner for the next customer.
THE BUSINESS OPPORTUNITY scam is another way businesses scam the buyer. Most legitimate opportunities are repackaged programs that enable buyers to go into business for themselves. However, several different approaches are used by those opportunistic companies that are deceptive. These might include exaggerated earnings promises low cost products or services that aren’t viable, or worthless business formats. Often, one or more of these promises never come true and
the buyer loses the investment. False advertisements and high-pressure telemarketing tactics bring in the victims. One of these involved a CD-ROM display rack with promises of high returns selling hot CD’s. The income from sales was to range
“between” $50,000 to $240,000. The CD’s that were promised turned out to be leftover titles no one wanted. In this case, the buyer never even received all the racks purchased and the buyer was out $30,000.
THE BOGUS ATM’s, this scam took a lot of planning. A bogus automated teller machine was set up in a likely area. Several of the nearest real ATM units were disabled with glue. The bogus machine was programmed to display a temporarily out of service message, but not before the machine collected account numbers and secret access codes from bank customers. Then the con artist used the information to withdraw huge amounts of money.
THE BAD CARD·GOOD NUMBER scam in this deal, the con artists actually manufacture phony credit cards but use real account numbers they have obtained by unscrupulous means. Some of the account numbers are found by their searching in trash heaps while others may be obtained by paying someone for the information.
THE FALSE COLLATERAL scam involves con artists who collateralize loans with false or worthless securities. Often these include foreign bonds or notes or even prime bank guarantees which do not exist.
THE BIG DEAL SCAM preys on small investors and businesses hungry for higher returns. Sham banks that sell phony investments are cropping up across the country. These phantom banks sell phony certificates of deposits (CD’s). They promise large loans with large upfront fees, high interest savings accounts, fake prime bank notes and other items to get the money from you into their banks. All kinds of official-looking documents convince the customers that everything is on the up and up. The problem arises when you want your money and you can’t find the bank.
The best advice we can give you is the old saying, “If it sounds to be true, it probably is.”
