Canadian businesses are losing significant amounts of money to fraudsters who claim to represent their regular supplier. The scam is targeting businesses that buy supplies from foreign wholesalers (e.g. China) and usually involves a spoofed e-mail informing the buyers of a change in payment arrangements. "Email spoofing refers to email that appears to have originated from one source when it was actually sent from another source." The e-mail notice provides new banking details and requests that future payments be made to this "new" account.
Every year, thousands of companies get fooled into buying "bargain" photocopier/fax toner, office supplies or directories over the phone. The sales person claims it's a "special offer", or "prices will be going up soon" and you have to buy today.
But if you check the bill when it arrives, it's not a bargain at all. The price may be 50% - 300% higher than usual. And worst of all, you may have bought substandard product.
Warning sign(s) - How to protect yourself
- Beware of unsolicited emails from individuals or financial institutions presenting an urgent situation requiring immediate attention.
- Prior to sending any funds or product, make contact with existing clients in person or by telephone to confirm that the request is legitimate.
- Watch for spelling and formatting errors and be wary of clicking on any attachments, they can contain viruses and spyware.
- Someone calls from a "Market Research Company" and asks for the make and model of your office equipment. Don't give out this information over the phone. Your authorized dealer already has this on record. This is a typical "set up call" for the sales pitch which follows.
- You unexpectedly receive supplies or a directory that you didn't order. Immediately contact the distributor. Advise them that you are not accepting the goods, you will not pay for them, and want them removed at their expense.
- Timely inspection of the goods is essential.
- If you choose to reject the merchandise, you must act within a reasonable period of time and give reasonable notice to sender.
- After rejection, do not exercise ownership over any commercial unit of the goods.
- Revocation must be within a reasonable time after discovery of defect, non-conformity or inflated price.
For unordered goods received
- Send a certified / registered letter to sender requesting proof of order.
- If no proof, then notify sender you are keeping the supplies as a gift.
- If there is proof that the goods were ordered, then follow procedures for ordered goods.
For ordered goods of inferior quality and/or inflated prices
- Inspect the goods.
- Reject as not conforming to contract, having defects or being overpriced.
- Written notice must be sent to sender. (certified/registered, return receipt requested)
- Hold goods for reasonable time with reasonable care for seller to dispose of.
- Inform seller that if more supplies are mailed, you will not accept the goods or take responsibility for their maintenance. (easily accomplished by an additional sentence in your letter of rejection.)
The following is a SAMPLE LETTER to revoke acceptance of goods. This letter should be sent by certified or registered mail with a return receipt requested.
Revocation of goods
I am the purchasing officer for (your company's name). Yesterday, we received X amount of (toner, paper, cash register or debit machine tape, a directory) from your company. Please be on notice that we are hereby revoking our acceptance of the delivered goods for the following reasons.
- Misrepresentation as our normal supplier.
- Inferior quality of delivered goods.
- Quality of delivered goods does not conform to the telephone conversation.
- The goods were never ordered.
- Inflated price of merchandise.
(Any other reasons which may apply to customer not wanting the delivered product).
For the foregoing reasons we are revoking our acceptance of the goods. Therefore, we require that you arrange to have the (toner, paper, register tape, directory) picked up and returned to your business establishment. We will hold the shipment for a period of 30 days after your receipt of this letter. If reshipping arrangement are not made during that time period, we will be forced to dispose of the goods.
I also require that any future correspondence from your company to ours be in writing. If you have (your company's name) on your records for future orders, please cancel those orders as none have been made.
(your company's name)
Businesses receive an invoice for a directory, publication or listing that they did not order or authorize. Fraudsters will place a call to the business and speak to employee and ask to confirm details such as the company's address, telephone number and other particulars. An invoice is sent to the company and often payment is made by the accounting department not realizing the company never ordered or agreed to pay for the directory. The fraudster may tape record the initial conversation and use that against the company to verify the purchase of the directory.
Warning sign(s) - How to protect yourself
- Educate employees at every level to be wary of unsolicited calls. Post notices and discuss during staff meetings.
- Compile a list of companies that are typically used by your business, give authority to only a number of staff to approve purchases and pay bills.
- Fraudsters will use real company names like Yellow Pages to make the invoices seem authentic. Inspect invoices thoroughly prior to making payment.
Canadian Anti-Fraud Centre
Competition Bureau of Canada
Ontario Provincial Police
Financial Consumer Agency of Canada
Better Business Bureau
(BBB Locator Tool)
Fraud: Recognize, report and stop it!
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