FTC warns office supply scams costing firms millions

|tab|

The Federal Trade Commission warns that businesses and organizations that lack adequate purchasing controls can easily fall victim to office supply scams. |ret||ret||tab|

According to an FTC advisory, various businesses, churches, and fraternal and charitable organizations are being bilked out of millions of dollars by bogus office supply firms. |ret||ret||tab|

The typical office-supply scam in-volves routinely ordered goods or services, the agency said. These may include copier paper, toner and maintenance supplies, equipment maintenance contracts, or classified advertising. |ret||ret||tab|

Fraudulent telemarketers often call and lie to get victims to pay for items they didn't order, or to get them to pay more than they agreed to for a real order. The caller may claim to be the victim company's "regular supplier" and de-scribe the offer as "special" or "good for a limited time only." |ret||ret||tab|

Con artists take advantage of holes in purchasing procedures or of employees not completely familiar with office practices. The office supplies actually peddled by bogus firms often are overpriced and of poor quality and the services they sell worthless.|ret||ret||tab|

|ret||ret||tab|

Types of scams|ret||ret||tab|

The FTC warns that office supply scam artists generally use three ways to take money: the phony invoice, the pretender, and the gift-horse.|ret||ret||tab|

|ret||ret||tab|

Phony invoice |ret||ret||tab|

The phony-invoice scam is designed to get the name and address of an employee so the organization can be shipped and billed for unordered goods or services. The invoice lists the employee as the "authorized" buyer.|ret||ret||tab|

Once the employee's name and ad-dress is obtained, the con artist will ship the unordered merchandise. The phony invoice arrives a week or so later, for two reasons: First, the inflated price as much as 10 times the price of the same goods from a legitimate supplier is less obvious if the invoice arrives after the merchandise has been received and stocked. Second, the chances are good that the victim has used the merchandise before the invoice arrives. (Many organizations mistakenly believe that they must pay for unordered merchandise if they've used it.)|ret||ret||tab|

|ret||ret||tab|

The pretender scam|ret||ret||tab|

In the pretender scam, the caller may pretend to be the victim's regular or previous supplier, a replacement, or an "authorized" supplier. By convincing the victim that the goods or services and prices offered are the same as before, the swindler hopes he or she won't bring up prices, quantities, and brands.|ret||ret||tab|

In one variation on this scam, the caller misrepresents the quality, quantity, type, price, or brand name. For example, the ribbons for IBM typewriters may not be IBM brand, or the toner for a Xerox copier may not be Xerox toner.|ret||ret||tab|

|ret||ret||tab|

The gift-horse scam|ret||ret||tab|

The gift-horse scam tries to create mistrust within an organization. The scheme starts when the caller tricks an employee into accepting a gift a free promotional item with a passing reference to merchandise or services. The victim receives overpriced unordered merchandise, followed by an invoice with his or her name. When the organization questions the employee, the fraudulent seller is betting that the employee will be nervous about the gift when he denies placing the order. The hope is that the organization will doubt the employee. When this scheme works, the organization believes that the employee blundered into ordering something that must be paid for.|ret||ret||tab|

|ret||ret||tab|

After the invoice arrives|ret||ret||tab|

Scam artists spend significant time and energy on collection efforts. They send as many invoices as it takes to get victims' money. Invoices often are stamped "Past Due." In extreme cases, they'll resort to real or bogus collection agencies and threats of legal action.|ret||ret||tab|

More information on office-supply scams and ways in which businesses and organizations can protect themselves from such swindles can be found on the Federal Trade Commission Web site at www.ftc.gov. [[In-content Ad]]