Renfrewshire Council

Scams against businesses

There are numerous examples of businesses, particularly small businesses and sole traders, suffering at the hands of scammers.

Below are examples of the most common types of scam which are aimed at businesses and some tips on how to protect yourself if you are targeted.

Trade Directories/Advertising Articles

Businesses receive official looking invoices from trade directories asking for their business details such as email and website addresses. They may appear to be offering free listings in various directories but there are often details in the small print showing that a contract has been entered and that charges will be made. Another tactic has invoices for listings being sent without any prior contact at all. The hope is that they will slip through the net and be paid without being checked.

There have also been instances where businesses have been offered the chance to have an article written about them in a magazine. The business is told that the interview and the creation of the article will be free. However, when the article is sent to the business for approval, charges for the use of pictures are included on the order sheet which needs to be returned for the article to be printed. The business is then chased for this amount which can often be in the £1,000's.

The European City Guide

This is a well known scam. It is based in Spain and has been closed down once already, but has popped up again. You will be contacted by telephone and conned into some kind of expression of interest. A while later, you will receive and invoice for over 900 Euro's for having your business advertised in the European City Guide.

Threats of court action will be made if you do not pay up. To date, we are not aware of any instances where this has gone beyond threats to actual court action.

Emergency Services Advertising Directories

This is a very similar type of scam to the European City Guide. You will be contacted on behalf of another business, selling advertising in some kind of directory or magazine aimed at the emergency services. A while later, you will get an invoice, whether or not you agreed to place an advert. The directory or magazine may not exist at all. Depending upon the sophistication of the scam, you may or may not receive a proof of the advert, and an example directory or be told that your telephone call has been recorded with you agreeing to the contract.

In other cases, small traders have found that their company details have been cut and pasted onto fake calendars, websites and directories without their permission. They are then billed for this.

To protect yourself be prepared, when receiving any phone call out of the blue, to simply so "no" and hang up. If you express any interest at all this could be used to imply that you have entered an agreement, so do not engage with the caller at all.

Office supplies scams

This type of scam is usually done by telephone but can also involve a salesperson calling at your business. Someone in your business will be spoken to and will probably be given the impression that another person in your business has authorised delivery of some office supplies. These could be anything from first aid kits to a photocopier. Your employee will be asked to sign for delivery or consent, or even just to acknowledge that contact has been made. Later this will be manipulated into an agreement to purchase the goods or services.

To protect yourself, make sure that no-one working for you will sign or agree to anything either in person or over the phone without referral to you or a senior manager. If this instruction is given in writing to all staff members, you will have a better case to defend a scam allegation that a staff member really had said yes to a delivery over the phone.

Trade marks registration scams

Here, a business will contact you out of the blue, with an offer to trade mark a logo or design for your business. This will then turn into a demand for payment for a consultancy service you never wanted. The original contact will look as if the service being offered will actually obtain you the trade mark. However, close inspection of the terms and conditions will show this is not the case.

To protect yourself, never express any kind of interest in an unsolicited offer of a service, either verbally or in writing. Most scammers may threaten to sue for non payment. But, if they cannot actually prove there is an agreement, they will not have any evidence to back up this threat. If you do not engage with them in the first place, they will find it much more difficult to make up such evidence.

Terms and conditions scams

These may not be scams in the strictest sense, but we get lots of complaints about restrictive terms and conditions in contracts which were not made clear when the service or product was agreed to. This often arises when a business is cold called and an agreement to take the product or service is made without much forethought.

The law gives businesses very few protections when entering contracts and it is vital that you do not enter a contract without being completely clear on the terms you are agreeing to.

It is always best to demand a written contract in advance of agreement and to read that contract carefully before deciding whether to go ahead.

Unscrupulous traders may make more money out of charges hidden in the "small print" than they ever do from the provision of the service they have sold.

A business may cold call you offering a service which you may or may not have been interested in before they called. In such calls or visits, they will describe the service they will provide in glowing terms. Descriptions are likely to include references to

  • Generous cancellation periods
  • Only small amounts of money to be paid up front or at all if you do not like the service/product
  • Short length of contact and easy exit conditions
  • Satisfaction clauses (e.g you can cancel the contract if you are not happy at any point)

After you have said yes, you are likely then to get a written contract with a fair amount of complicated small print in it. You would be better protected if you had read this before you agreed to the service, but if you have not done so, it is absolutely essential to read it in great detail now.

We are told again and again that the things said to describe a service do not tally up with, or only tell half the story about restrictive terms and conditions that impose:

  • Very short or no cancellation periods
  • Very long and difficult to comply with termination periods
  • large cancellation fees, payable whether you are satisfied with the service or not
  • Other charges you were not told about, but which are hidden in the terms and conditions
  • Fees for things you thought would be free, but which are simply given a different name in the written terms

Technically, contract law states that you are only bound by terms in a contract that you have agreed to. However, if you to try to challenge written terms after you have entered an agreement, you will have to prove you were not aware of them before you said yes. This is often very difficult, especially if you come to challenge the conditions many months after the agreement was formed.

To protect yourself, try not to engage with cold callers in the first place. If you want to buy a product or a service, go out and research the companies selling them yourself and only contact those you are interested in. Nearly all business to business scams rely on a certain amount of inertia from the victim - either:

  • not doing research before saying yes, or
  • not demanding and reading terms and conditions before agreeing to the contract, or
  • not properly querying demands for payment when they are received and just paying them.

If you do not engage, do the research, find out about the terms and conditions and check that all demands for payment are valid, you will be better protected.

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