False Billing, Directory and Advertising Frauds

A directory entry or unauthorised advertising fraud targets small businesses, trying to bill you for a listing or advertisement in a magazine, journal or business directory.

The fraud might come as a proposal for a subscription disguised as an invoice for an entry in a bogus international fax or trade directory. Sometimes they are created to look like those used by genuine directory publishers.

Alternatively, you might be led to believe that you are responding to an offer for a free entry—but in fact, the order is for entries requiring later payment. Another common approach used by fraudsters is to ring a firm asking to confirm details of an advertisement that they claim has already been booked. The fraudster might quote a genuine entry or advertisement your business has had in a different publication or directory to convince you that you really did use the fraudster’s product.

If you refuse to pay, they might also try to intimidate you by threatening legal action or even physical harm.

Warning signs

You receive a call from a business directory or other publication you’ve never heard of, ‘confirming’ your entry or advertisement.

You receive a document in the mail that appears to be an invoice from a publication you’ve never heard of.

The caller claims that the government requires you to be registered in their register.

The caller reads out your listing or advertisement and you recognise it as a listing you put in a different publication.

Protect yourself from directory and advertising (false billing) frauds

  • Make sure the business billing you is the one you normally deal with.
  • Always check that goods or services were both ordered and delivered before paying an invoice.
  • Never give out or clarify any information about your business unless you know what the information will be used for.
  • Try to avoid having a large number of people authorised to make orders or pay invoices.
  • Never agree to any business proposal on the phone: always ask for an offer in writing.
  • If you are unsure about any part of a business offer, ask for more information or seek independent advice.

As well as following these specific tips, find out how to protect yourself from all sorts of other frauds.

Do your homework

If you think that the publication is a legitimate one and you may have authorised an entry, ask for proof of its existence. You should also make sure you keep written records of authorisations for advertising or directory entries so that if you receive an invoice or a telephone call, you can go back to your records to check it. Always get proof of the entry before paying anything. You do not have to pay for any directory entry that you did not specifically authorise in writing.

Another way to look into the legitimacy of the directory is to ask for details of other local businesses that have previously advertised and check with them that they received what they paid for.

Be sure to check with your local fair trading agency—they can tell you if they have taken legal action against the person who has contacted you.

The ACCC has recently instituted proceedings in the Federal Court against a Spanish-based directory listing company, European City Guide S L, trading as Industry and Commerce. It is alleged that Industry and Commerce engaged in misleading or deceptive conduct and made false or misleading representations. This matter is listed to return to court on 9 February 2010. For more information about this case, refer to the ACCC’s media release.

The ACCC warns business owners to be wary of unsolicited letters/emails that may appear to be trade mark, patent and/or renewal invoices. If you own a registered patent and/or trade mark, you may find yourself the target of letters/emails regarding overseas registration of your application. If you are unfamiliar with the organisation, especially letters/emails requesting payment for unsolicited services, you should treat the request with extreme caution.

Never pay for an advertisement or entry you didn’t authorise. If you receive a telephone call or an ‘invoice’ that comes from a publication you have never heard of, or that you don’t remember putting an entry in, don’t pay or give out your details until you have looked into the matter further.

(Source: ACCC)

About Rushmore Forensic

Rushmore Forensic has assisted exporters in Australia with extricating themselves from aggressive threats made by overseas fraudsters.  If you have a matter which requires expert advice, please don’t hesitate to contact Andrew Firth for a complimentary and confidential discussion.

Andrew Firth is a Forensic Accountant in Sydney and Director of Rushmore Forensic. He has over 10 year experience in financial investigations and other aspects of forensic accounting.  Andrew is a former investigator with the Serious Fraud Office in the UK.  He has also worked for KPMG and Deloitte during his career. Andrew is based in Sydney and provides forensic accounting services throughout Australia.

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