Scammers are targeting aged care businesses, offering a free advertisement in a directory, but concealing a fee in the fine print.
Consumer Affairs Victoria has received several reports from aged care businesses affected by this unauthorised advertising scam.
In one case, the business was offered free entry in a directory and artwork for the advertisement.
Later, the scammer sent the artwork to the business for proofing and asked it to fax a confirmation, but a note in the fine print said the listing would cost the business $1995 plus GST and the business was then invoiced for this amount.
ACCC deputy chair Michael Schaper previously told SmartCompany small businesses are often targeted by these types of scams because they generally have less sophisticated record-keeping systems than bigger businesses.
“Small business owners are generally honest souls and think if they receive a bill they should pay it. The small businesses owner is usually paying the bills late at night or on a weekend and often doesn’t have anyone to raise the alarm,” he says.
Schaper says it’s always important to read the fine print.
“There have been several scams like this in the past few years, where the fine print says you’re actually agreeing pay money,” he says.
The scam is similar to the long-running ‘Yellow Page’ scam, where businesses receive a fax seeking confirmation of their contact details by a company pretending to be the Sensis Yellow Pages directory. While the fax looks to be seeking contact details of the business, in the fine print the business is actually agreeing to pay $99 a month for a minimum of two years.
In this latest scam, aged care businesses have reported also receiving invoices for an advertisement which has not been ordered, for a publication that doesn’t exist and a contract of services disguised as an invoice.
In one case the business also received details of an advertisement it had previously ordered, but for a different publication.
According to the Australian Competition and Consumer Commission businesses lost more than $93 million to scams in 2012 and 84,000 were reported to the watchdog.
However a study by Curtin University published in June last year found for small businesses the financial cost of a scam often greatly exceeds the scammed amount.
The time small businesses spend rectifying scams can be up to 100 hours.
Consumer Affairs Victoria is urging businesses to organise filing and accounting systems to detect bogus accounts or invoices, check to see if the publication asking for information is genuine and ensure the invoice has been authorised.