Ever received an invoice on goods or services you’ve never ordered?  These invoices can look like the real thing, but they’re phony.  Invoice scams have caused huge losses resulting in millions of dollars bagged by fraudsters each year.  Small businesses are at greater risk for this fraudulent activity since they’re least likely to have extra security measures in place.

How to Determine Invoice Scams

These deceptive practices can be done by snail mail, electronic mail, or unsolicited phone calls.  Know that a fake invoice can look like the real thing – complete with an account number, invoice date, and payment due date.  Here’s how you can spot a scam:

1. You get a phone call from a person or company you don’t know.  They may bully or harass you into making a payment, or give you threats of legal action.
2. You get billed for small amounts of unexplainable charges.
3. You get an invoice that uses scare tactics, demanding immediate payment.
4. You get an invoice for paid ads, yellow pages or directory listing, membership, renewal, magazine subscription, or items you didn’t order.
5. You receive free samples or gifts that oblige you to pay a fee.  You may even receive a phone call about it.  If you opt to return the merchandise, you will be asked to pay for restocking or shipping fee.

Speaking Legalese:  Keeping Informed Matters

Some fake firms are involved in the shady practice of sending phony invoices in the hope of making a sale of their products and services.  Know that this is a criminal offense that is punishable by law.  More precisely, these rules are stated in Title 39, Section 3009 of the United States Code ( under the Postal Reorganization Act of 1970 ), where such acts are considered unfair trade practices under the law.

Protecting Your Business:  Ways to Prevent Invoicing Fraud

1.  Knowing your rights helps a lot!  Know that the Federal Trade Commission states that you have the right to NOT pay for unordered merchandise.  In addition, you can keep these items or throw them away.  The “finders-keepers” rule applies.

2.  Assign specific individual(s) who will make your purchases. Be sure a purchase order is issued –  written or electronic, to the supplier.  Secure your blank order forms.

3.  Always scrutinize an invoice.  If you question anything on an invoice, call the company and ask for an explanation.  If you have someone who checks all these invoices, make him/her wary of fraud.

4.  Read the fine print and make sure you won’t have your credit card charged for automatic renewal.  If you sign up for a service online, save and print out the acknowledgment page.

5.  If you have double checked and realize that you received a fake invoice, you may file a complaint with your local Better Business Bureau, or contact the Federal Trade Commission at toll-free number:  1-877-FTC-HELP (1-877-382-4357).  For the hearing-impaired, dial: 1-866-653-4261.  To file a complaint on fake invoices received through postal mail, you may fill out this U.S. Postal Service online complaint form, or you may print it and send through snail mail.  If matters are urgent, don’t hesitate to contact your local law enforcement agency.  Bugged by telemarketing calls?  You can put your name on the Do-Not Call list.

When it comes to invoices, never trust a complete stranger.  Eliminate worry and all those annoying phone calls by setting up a safe electronic invoicing system which gives you a peace of mind.  Better safe than sorry!

Tags: accounting scams, avoid invoice fraud, avoid invoice scam, billing, billing fraud, billing scam, invoice fraud, invoice scams, invoicing, prevent scam

This entry was posted on Tuesday, June 8th, 2010 at 9:55 am and is filed under All About Invoices. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.