How to avoid false billing scams

by AB20 Jun 2014
Small business owners are being warned about false billing scams ahead of the financial year end.

The Australian Competition and Consumer Commission is running ‘Fraud Week’ to raise awareness, after its Targeting Scams Report 2013 revealed a 45% increase in complaints.

“False billing scams continue to be the most common scam targeting the small business community, with 3,672 reports received in 2013 and almost $725,000 reported lost,” ACCC deputy chairman Dr Michael Schaper said.

False billing scams attempt to trick busy businesses into paying for unwanted or unauthorised listings or advertisements in magazines, journals or business directories. 

“With the end of the financial year being a prime time to settle accounts, it pays to take a moment and check if invoices are the real deal,” Schaper said.

“Often a scam is disguised as an outstanding invoice to get the business to sign-up for unwanted advertising or office supplies. Another common approach involves sending invoices for the renewal of a non-existent domain name registration.”

ACCC has taken enforcement action through the courts where it can to deter and discourage scammers targeting Australian small businesses.

In March last year, the Federal Court ordered Adepto Publications, its sole owner and a former manager to pay $750,000 after they admitted to making made false and misleading representations about advertising services that were never requested. The operators also falsely claimed that the advertising services were for publications with a philanthropic slant.
Last December, the Federal Court ordered the sole director and the sales manager of Artorios Ink to pay $50,000 each after they admitted to deliberately misleading and deceiving small businesses to generate ink cartridge sales.

Schaper offered small businesses the following advice on avoiding false billing scams:
  • Make sure the business you are dealing with is the real deal – if you receive a form or tax invoice out of the blue, verify who they are by contacting the company directly using contact details you sourced independently through a phone book or online search.
  • Make your business ‘fraud-free’ – effective management procedures can go a long way towards preventing scams. Have a clearly defined process for verifying and paying accounts and invoices, and try to avoid giving too many staff authorisation to make orders or pay invoices.
  • Don’t be intimidated – do not let anyone pressure you into making decisions involving payments or contracts. If you are unsure, always seek independent financial or legal advice.
  • Update your IT security software regularly and make sure you use and offer secure online payment methods.

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