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Business scams 

Scammers rely on the fact that you are very busy and are more likely to provide information to help them carry out their fraudulent activities.

What to do if you have been scammed  

If you believe you have been scammed, you need to do five things immediately.

  1. Cease any contact with the scammer.  The scammer will never refund your money.
  2. If you have given your bank or credit card details to a scammer, contact the bank or credit card organisation to freeze your accounts before the scammer steals your money
  3. Write down any details you get about the scammer – such as the telephone number, email address, website address or car registration number if the person has knocked on your door.  These details can help Fair Trading detect scammers, or close down the ways in which scammers are contacting people.
  4. Report the scam immediately to Fair Trading (see below).  Every day you delay, more people may be scammed.
  5. Tell your colleagues friends and family about your experience and what you have done about it.

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Types of scams 

Scammers target businesses in a range of ways and you need to be vigilant so you are not scammed.

False billing or invoice fraud 

False billing targets businesses by telephone, mail, email and fax. The scammer will supply you with an invoice for products or services you have not ordered or received, hoping, because you are busy, that the invoice will be paid.

Fair Trading is targeting false billing scams aimed at small businesses throughout 2012.

If you run a business that has been targeted by a false billing scam, we would like you to report your experience to Fair Trading. Our investigations rely on people who to report illegal conduct.  You can also assist us to prosecute scammers by providing a written statement and then attending Court.  For that reason, we are not accepting anonymous information.

Report false billing scams

To report false billing schemes, please lodge an online complaint.

Advertising and directory listings

A representative from a magazine or directory calls and asks for you by name and then falsely claims that they spoke to you several months earlier and you agreed to purchase an advertisement or a directory listing.

Often you will be asked for a special code or word, which is later used against you as proof that you agreed to purchase the advertising. Sometimes they will falsely claim the magazine is about to go to print and if you don't pay immediately, you will miss the print deadline. 

The scammer may also contact you via fax offering you a directory listing or similar service. Once you have completed the offer, you will begin to receive demands for payment from the company for a service you will not receive.

Alternatively, you may receive an invoice demanding money for an advertisement in a magazine or to re-new an entry in a business directory that you have never heard of. 

Be careful of scammers who use existing company names and names that sound similar to legitimate publications but which don't actually exist.

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Domain name renewal scam 

A domain name must be renewed every couple of years. Domain name renewal scams can work in one of two ways. You might be sent an invoice for a domain name that is very similar to your current domain name but might for example end in net.au instead of com.au – the scammer hopes that you don’t notice the difference and just pay the invoice. Alternatively you could be sent a letter that looks like a renewal notice for your actual domain name, but is from a different company to the one you registered your domain name with.

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Computer virus scams (the Microsoft scam) 

A scammer calls you claiming to be a representative from a reputable information technology firm. The scammer asks you to turn on your computer and provide certain information, so that the scammer can take control of your computer and get your banking details.

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Banking, credit card and online account scams 

These scams aim to get you to hand over your banking, business and personal information by sending you emails, often saying they are from your bank, asking you to verify your account details, including your password.

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Telephone scams (telemarketing fraud) 

Telephone scams are also known as ‘blowing’ or telemarketing fraud. Scammers convince you that:

  • you placed an order some time ago, they ‘lost’ the order number so you supply a new one
  • you had taken out advertising or a directory listing (in a non-existent publication) and they were just chasing up urgent payment
  • a colleague had approved the deal (using a name from your office)
  • they are a representative from a government department demanding money you allegedly owe.

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Business opportunity scam 

Business opportunity scams are offered through spam email, a phone call or letter, offering you a way to make a lot of money quickly.

The offer could be a scam if you:

  • are required to make an upfront payment
  • have to recruit other people to the scheme (pyramid schemes)
  • pay for a system to make money that does not work.

Be wary if the business offering the opportunity only provides a post office box address.

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Fax back scam 

A fax back scam is an unsolicited fax that can offer you anything from amazing diets to fantastic deals, business directory entries, competition entries or catalogues of goods and services – all you have to do is send a fax back to a premium rate number (starting with 190). Premium rate faxes can be charged at more than $6 per minute. The scammers make sure your fax will take several minutes to get through, resulting in hefty, unnecessary phone bills (a single fax could cost you $20 or $30).

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Overseas scam 

Scams frequently cross national boundaries so business owners need to be on the alert for suspect deals offered by overseas organisations. In one scam, people claiming to be representatives of the Nigerian Government targeted firms with the proposal of depositing money into their bank accounts. In return for allowing use of that account, the firm was supposed to receive a substantial share of the funds.

To take part in the deal, the business was required to supply blank copies of its letterhead, a stamped and signed invoice and bank account details. However, just before they received their share of the funds, business owners were asked for a ‘tax’ or cash to cover last minute expenses or bribes. The businesses lost $250,000 to more than $1 million and never received their promised share of the other money.

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How do scammers get my details? 

A lot of information you may consider personal is actually public knowledge. Details such as address, family relationships, date of birth, and business details can be discovered through the electoral roll, telephone listings and websites.

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Avoiding scams 

Scammers thrive on uncertainty and target poorly organised businesses.

To avoid scams:

  • never send money or give credit card, account, business or personal details to anyone who makes unsolicited offers or requests for information.
  • don’t open unsolicited emails or click on a link provided in an unsolicited email as it will probably lead to a fake website designed to trick you into providing personal details.
  • have clear purchasing and advertising policies and keep proper records
  • don’t approve purchases over the phone – get them in writing first (a quote or issue a purchase order number to all suppliers)
  • don’t respond to offers, deals or requests for your business or personal details without taking the time to independently check the request or offer.
  • check the details of any new trader before doing business including their Australian Business Number (ABN) at www.abr.business.gov.au
  • check company registration, lodgement of company documents and the banned or disqualified directors’ register at www.asic.gov.au/transactions
  • check registrations of businesses and community organisations with your local Fair Trading Centre or call 13 32 20
  • when considering advertising, ask for copies of previous editions and check the publication’s circulation with the Audit Bureau of Circulations www.auditbureau.org.au
  • never give out or clarify information about your business unless you know what it will be used for
  • carefully read all the terms and conditions of any offers as they may have hidden costs
  • limit the number of people who can approve spending and train staff to identify and deal with fraud
  • seek professional help (accountant/solicitor) if significant money, time or responsibilities are involved
  • you should only pay for advertising that has been authorised in writing by your company. If an advertising invoice does not contain circulation details, the publishers business name and address, or the details of the advertisement date and charges, do not pay it until you investigate if further.

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Reporting scams and fraud 

You do not need to lose money to be able to report a scam.

If the scam originates from NSW or you know the name of the business or trader and they are located in NSW, you can report the scam to NSW Fair Trading online through Lodge a complaint, call 13 32 20 or in person at one of our Fair Trading Centres.

If the scam originates from outside NSW or overseas you can report it via SCAMwatch. SCAMwatch is a website run by the Australian Competition and Consumer Commission (ACCC) and provides information to consumers and small businesses about how to recognise, avoid and report scams.

For more information, visit www.scamwatch.com.au or call 1300 795 995.

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