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Top 10 Best Vendor Scams (and how to catch them)
The scammers friend is the new hire (and absent owner). This could be the admin, office manager, or even bookkeeper you hired recently. They are often the one kept in a vacuum so they know little to nothing about what other departments are up to. Perhaps you did not train them well and/or they may be inexperienced in the ways of a professional office. Scammers love business owners and their staff who are too busy, too unperceptive, or too apathetic to care about the bookkeeping. Bookkeeping tracks your cash; who was paid and for what. When you create a culture where it is almost impossible to get a receipt (talking to you owners), you create the perfect environment for scams.
As homage to David Letterman, the top 10 best scams are:
10. Domain Registry is a great example of the domain scam. Have you been paying website domain renewal twice? Once to say GoDaddy and again to these folks? We have personal experience catching this scam and trying to help the client get their money back.
Solve it: The employee or contractor in charge of marketing and/or the website needs to sign off on all website related expenses before they are paid.
9. Annual registrations with state agencies are a classic. Since your company and address are normally public, the scamming company can easily send you what looks like a bill from the government. Any admin employee scared of getting yelled at (again) will probably just pay it. The scamming company will most likely pay the government. Only a fool would get caught impersonating the government AND taking the government’s money. Expect to be charged at least double what you would pay directly to the state. See our state’s page with more info
Solve it: This should be a budgeted line item for your company. The renewal should be in the company calendar of important deadlines & Due dates with the vendor name listed. This is an example of institutional knowledge.
8. The ink scam; it’s a classic. The office employee gets a phone call and the person on the phone says either “we can get you ink cheaper” to catch the thrifty marks or “it’s time to order ink again” to catch the new or neglected admin that has no idea if that is something they should know to do. Don’t get scammed by the Toner Phoner.
Solve it: Some employees will not hang up for fear of getting in trouble (again) for their phone skills. Others are so new to the profession they just go with it. When you hire office staff, one of the on-boarding items is the scam talk. Give them examples of scams and tell them who is in charge of procurement, who to ask if something seems phishy, and empower them to just hang up.
7. “I know what you have been looking at on the internet.” This entertaining email scam informs you that they know everything. They have your password. They have been watching you on your computer. And they will tell everyone what is in your browsing history if you don’t pay up.
Ok, I admit it. I purchased $30 of unneeded things last month. At Amazon! The shame.
Solve it: Your employee handbook should include a technology policy. This policy should have a nice subtle way of saying do not watch porn on your work computer. If a coworker falls for this scam, you have a whole lot of other problems to worry about.
6. “Your computer called and it wants help.” The not-at-all Microsoft company will happily take care of this entire issue with just a credit card number to have on file.
Solve it: Every company needs an IT guru. New office staff should be provided with a short list of vendors that provide services to the company. This is also institutional knowledge.
5. “Your QuickBooks file emailed us and it is corrupted.” These folks have actually helped a client of ours. They did not seem to harm the computers but they did completely misrepresent themselves.
Solve it: Did we mention every company should have an IT guru? Someone that will respond to an email or text in 24 hours and can spot a scam.
4. Intuit Calling. We are Intuit and you need to upgrade your software. These folks take over your account and you start paying them instead of Intuit. Much like the government registration scam, they do pay Intuit on your behalf. And they do charge you a premium to do it, which when questioned, they insist is for ongoing support.
Solve it: Software upgrades should be in the budget and in the company calendar of important deadlines & due dates.
3. Mandatory Poster scam. You can get them for free from the government. Oregon sells all-in-one pretty posters that don’t take up as much room. There are even some reputable companies that provide employment law updates along with pretty posters. The notice looks like a bill and only an empowered, experienced, and perceptive office professional will catch this scam.
Solve it: Someone at the company needs to be in charge of HR basics. That person needs professional development annually. The state of Oregon provides excellent trainings. Maybe your state does too.
2. Credit card charges that look like something or nothing. We have seen so many fraudulent charges over the years. They don’t get caught right away because the person in charge of adding data to QuickBooks is guessing at what the expenses are (because they don’t get receipts).
Solve it: Everyone in your company needs to provide receipts for any credit card use including the owner. Before you complain that it’s too hard to accomplish…There’s an app for that!
And the #1 scam is….
1. “Your social security account has been suspended.” Yey! Does that mean I can quit paying self-employment tax? We know how absolutely scary letters from the federal government can be for office staff. By now, we have seen too many to be phased because we know what happens next. Fear of the unknown is the key to getting the award of #1 Scam. Who has ever had a family member or friend get their social security number suspended for bad behavior? No one. Because it’s a lie.
Solve it: The federal government only sends paper correspondence. It is the most secure method of communicating with you. It says so right here at irs.gov.
Summary
The FTC reported people losing $1.48 billion to fraud. That’s billion with a B folks!
Did you see the recipe for success above?
1. Have an IT guru on call and empower employees to contact the guru when needed.
2. Institutional knowledge must not be lost when your long term admin leaves. Create a calendar of important deadlines and dates. We use Boomerang for Gmail to send our future selves reminder emails.
Create a short list of resources available to the office staff like the IT Guru. Empower them to handle the small stuff by working with the contracted service provider.
Have an org chart and employee handbook and use them as tools to keep your staff in-the-know.
3. Train your staff. Have the scam talk with all new hires during their first month of employment. Too many people think “anyone can do it” when it comes to administrative and accounting staff and they don’t bother training. Or worse yet, they think anyone with a vagina can do the work, an even more dismissive and offensive mindset. Being an administrative or accounting professional (and it is a profession) takes a special skill set that not everyone has.
4. Provide professional development to office staff. Like all professions, administrative and accounting staff need continued education. As many of you know, the training is part of the development but so is getting the chance to talk to colleagues. Like about the most annoying scams of the season.
5. Never make your employee more afraid of you than of the things that could hurt your company. We see verbal abuse in office environments too much. There are no gender barriers when it comes to being a huge jerk.