BBB Tip of the Week: Fake invoices
Small businesses, schools and other organizations in Washington received fake invoices over the past year from a California-based company, UST Development Inc., also going by the name US Telecom.
The invoices looked like a legitimate bill: The 800-number on the invoice would reach a US Telecom representative who explained that the bill was for telephone equipment and maintenance.
Yet none of the small businesses, schools or organizations receiving the invoice had ever purchased any equipment, services or warranties from them. These fake invoices were actually solicitations for business.
The Los Angeles BBB has given UST Development/US Telecom an F rating and has more than 450 open complaints against the company. And many businesses and organizations in Washington filed complaints with their local BBB office and state government agencies.
Aided by these complaints, the Washington State Attorney General’s Office brokered an agreement with UST Development/US Telecom to stop sending the invoices. The fake invoices are believed by the Attorney General’s Office to violate the Consumer Protection Act’s restriction on unfair and deceptive practices.
These types of scams targeting businesses and organizations, both big and small, are common. They play the odds that multiple and different people are doing the purchasing and accounting and that these people are not in close communication about these activities.
So how can you protect your business from a scam like this? The BBB offers the following tips.
• Make sure accounts payable is vigilant in spotting solicitations that look like an invoice. Some lookalikes will state “This is not a bill.”
• Keep a list of all contracted vendors and businesses, including the name and phone number of each contact.
• Carefully examine any bill or invoice from an unknown business. Contact the business to ask for documentation, dates of service, proof of delivery of goods and a reference number.
• Establish effective controls for paying invoices. Collect receipts or bills of sale from purchasers, and verify authorization of all invoices.
When in doubt, contact the BBB for a business review before signing an agreement or contract and before providing any payment information.
You can request a Business Review or file a complaint with the BBB at www.bbb.org or by calling 509-455-4200.
By Erin T. Dodge, BBB editor