How to avoid being caught in a scam
From large corporations to small stores, businesses are increasingly becoming the targets for a range of schemers and scam merchants. Such tricksters rely on your being too busy to give a second thought to giving them the information they ask for, purchasing a bogus service or product, or paying an unjustified invoice. Whether the con-artist uses the telephone, the mail, or the Internet, your best defence against scams is to be vigilant and to follow these rules…
1. Be aware of how you can get scammed.
There are many ways clever con- artists try to catch you out, but the two most common are:
Passing off: They try to mislead you into thinking they are someone or something they are not - often called 'passing off'. Here they may try to pass off that they are from a registered charity or a government agency.
Fake billing: They try to convince you to pay for something you have not asked for. Fake billing often involves offering advertising, usually in bogus magazines or directories, or trying to get you to pay for something never ordered or delivered.
2. Ensure you have enough information to decide.
Understand any offer being made, particularly if you are not dealing with a known company. It pays to get all the details and promises in writing, especially if the offer is being made over the telephone. And, prior to making any decision, consider the following...
Who are they?…
- Whom do they represent?
- Why have they contacted you?
- What service do they provide?
- Find the organisation's telephone number in the white pages directory and make contact. Verify that they are who they say they are.
Do you really need their service?…
- What do you get for your money?
- Why is their offer better than others?
- Have you seen or checked their previous work or references?
How much will it cost?…
- If it's free, is there any way this service will cost you money later? Will you automatically be charged for anything in the future?
- If it's not free, what will all the costs amount to? When will you have to pay? Is there a money-back guarantee? Get it all in writing.
- Only when you have enough information to feel confident about the service and the provider should you make the decision to proceed.
3. When in doubt, check the contract.
If you suspect deception, and the con-artist tells you that they already have a contract with you, you should:
- Ask them to show you evidence of the contract.
- Check any evidence to see if it shows what you received, how much it costs, and that you did indeed accept those conditions.
If it seems that you have entered into such a contract, and you think you have been conned, seek legal advice.
4. Remember these essential rules:
Remember these essential rules:
- Do business with companies you know and trust. If you don't know them, check them out.
- Be clear on what is being offered. Seek details and get it in writing.
- Ask for the name of the person you are speaking to and whom they represent.
- Take notes of conversations including date, time, names, and important points.
- Read any written documents carefully. Seek the professional help of a solicitor or accountant if significant money, time, or responsibilities are involved.
- Never be pressured into making an immediate decision. Reputable companies will be happy to answer all your questions and to give you time to decide.
- Shop around locally to compare services and prices.
- Ask for references and contact them to check out the quality of services performed or products provided.
- Be suspicious of incredibly cheap prices. Unrealistic prices can be the warning bell of a scam. Don't forget: you get what you pay for.
- Don't pay the full amount upfront. Pay the balance only when satisfied.
- Check all bills and invoices carefully. It's hard to get your money back once you've paid a con-artist.
- Have a number of people authorised to pay cheques. Keep the number to a minimum and keep a tight control on them.
- Guard your financial and other account information. Never give out or clarify any sensitive information about your business unless you know what it is being legitimately used for.
- Never agree to anything on the telephone. Ask for the offer in writing.
- Educate your employees about the hazards of scams. Ensure they understand their roles and responsibilities.
- If you are approached by somebody with what you think might be a scam, contact the appropriate State consumer affairs and fair trading agencies. Discuss any suspicions, seek clarification, or report any instance where you have fallen victim.
