Your company receives a call, an email, or a fax to confirm its address and contact information. You are extremely busy in your small, growing business, so you confirm the information and move on to the next pressing issue. A few weeks later you receive an invoice for online advertising for several hundred dollars from an unfamiliar company. When you call their customer service you are told they have a recording of you agreeing to the services and if you don’t pay, they will send your file to a collection agency. You don’t have time for this, so you pay the invoice and get back to work. After all, online advertising can’t be bad for your business!
This is how it’s done. You’ve been scammed. Chances are your company’s name will get buried in a listing that no one will see, because it’s not even accessible via regular search methods. That’s their definition of advertising.
Directory scams are very common; they target businesses across Canada and around the world. Fraudsters use misleading tactics to pressure businesses to pay for directory listings of little or no value. In some cases, they lead businesses to believe that a contract is already in place during the initial communication. They make it look official by already having the company’s contact information on hand when they’ve simply obtained that information online, or through existing directories. These scam artists may also record your voice while you confirm your business information, which can be edited to suit their fraudulent purposes.
This type of scam happens quickly, and the financial consequences are harmful to thousands of small businesses in Canada every year.
Use these tips to help avoid falling victim to fraudsters:
- Educate yourself, your employees and your co-workers to be cautious of unsolicited calls and emails.
- Create a list of companies that are typically used by your business.
- Limit the number of staff who can approve purchases and pay bills.
- Clearly define procedures for verification, payment and management of accounts and invoices.
- Examine invoices carefully before making any payments: fraudsters will use company names or logos similar to those of known businesses to make their invoices seem real.
- Ask questions and read all documents very carefully before confirming your business information, whether it’s over the phone or by signing a document, to ensure that you will not be unknowingly charged.
If you’ve been the victim of a directory scam or if you have information about this type of scam, report it to the Competition Bureau (1‑800‑348‑5358) or the Canadian Anti-Fraud Centre (1-888-495-8501).
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