Unordered merchandise scams are a common nuisance that many businesses have encountered. This is how the scams typically work: Schemers make unsolicited calls to businesses and non-profits, oftentimes under the guise that they are confirming an existing order, verifying an address, or offering free samples or catalogs. Soon after the calls, merchandise is sent to the business and then demands for payment begin. Many of these scammers use high-pressure tactics and threats in order to receive payment. The invoices that accompany these unauthorized orders are often inflated and it is difficult to get the fraudsters to take the merchandise back and stop the harassing calls for payment.
The merchandise can range from toner and office supplies to light bulbs and cleaning products. No one is exempt from being a target as they prey on small family-owned businesses, schools, churches, charities, healthcare facilities, community care centers, and hotels. Many times the victims pay thousands of dollars to the schemers before detecting the scams.
The Federal Trade Commission (FTC) has banned F-rated office supply telemarketer Standard Industries for employing an unordered merchandise swindle and scamming businesses. The scammers lied to businesses, telling them they had done business with them before and claiming they were sending free samples and catalogs. They then sent unordered shipments of office and cleaning supplies, along with invoices that jacked up the cost of these items far above market price. The FTC ordered that Standard Industries and their principals be banned from telemarketing these supplies and from misrepresenting that they have a preexisting relationship with the consumers they solicit, or that they send free samples or catalogs to, or that consumers ordered the goods sent. They were also hit with a more than $58 million judgment, which was suspended based on their inability to pay. A court appointed receiver has taken over the assets of the business.
It is critical for businesses to be aware of these types of scams and know how to protect themselves. Here are some useful tips:
If you receive merchandise that your business did not order, under the law you do not have to return or pay for it. According to the law, the merchandise may be treated as a gift and can be used or discarded however the business chooses.
Your staff should be educated on how to spot these scams. Train them on how to handle solicitation calls or unsolicited calls regarding office supplies and orders. Preferably have a designated employee or individual that addresses these calls. Also, share the information with accounting staff so that invoices are not mistakenly paid for unordered deliveries.
For more valuable pieces of advice for businesses, visit BCA’s blog article 5 Deceptive Scams Small Businesses Should Be Aware Of.
About Business Consumer Alliance
Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.