Avoiding telemarketing scams

There’s no doubt that yellow pages and directory listings can provide a big business boost – and it’s for that very reason that fake business directory scams work so well - according to the Federal Trade Commission, consumers lose more than $40b every year to telemarketing scams.

Recently, one of my clients was target of such a scam, and to help you protect your business from similar scams, here’s the breakdown of how they operate from the FTC website:

The Call.
First, con artists make cold calls to offices. They ask the person answering the phone to “confirm” the address, telephone number, and other information, claiming it’s for a listing the company has in the yellow pages or a similar business directory. The scammers then fire off a rapid series of questions they may tape-record, sometimes sliding in a confusing reference to the cost. The scam works because fraudsters convince the person who picks up the phone that they’re just “verifying” an arrangement the company already has with the directory.

The Bill.
The con artist then sends urgent “invoices” for $500 or more — sometimes including a copy of the “directory.” They’re usually worthless and are never distributed or promoted as promised. Often, they’re just websites with listings of various businesses. In many cases, the person paying the bills will simply cut a check, not realizing that the company never agreed to pay the hefty fee for the directory. But if businesses resist, the scammers turn up the heat, threatening collection or legal action to get payment. They may use the name of the person who answered the phone or play a “verification tape” as “proof” that the company owes them money. Often these tapes have been doctored or the nature of the transaction was rattled off in a way no one could have understood. If companies stand firm in their refusal to pay for services they didn’t authorize, the scammer may try to smooth things over by offering a phony discount or threaten legal action. At this stage, many companies pay up just to stop the hounding. What they don’t know is that they’ll likely end up on a 'sucker list' and get more bogus invoices — either from the same scam artist or from others who have bought their contact information for a new scheme.

The FTC has filed lawsuits against several of these companies, who typically use misleading names such as Yellow Pages Inc, or Google Y pages, even though they have no affiliation with the real directory companies. The scammers also use fake addresses to hide their real location.

If you do receive a call you think is a scam, check your invoices carefully, and never send them any money, no matter how threatening they get. Also, tell callers if you don't want to hear from them again. If they call back, they're breaking the law. You can feel comfortable hanging up.

The FTC website www.ftc.gov also has some great information on other scams that target small businesses.