Beware of directory listing scams targeting small businesses
Added: April 2012
SCAMwatch is advising businesses to beware of unsolicited faxes offering paid listings in scam online directories.
How the scam works
- Your business receives an offer, often via fax, to list your businesses details in a scam online directory.
- The offer may aim to lock you into an expensive ongoing contract for periods of 12, 24 or 48 months. You may be asked to pay 12 months in advance. Contract fees can be over $1000 per year.
- The offer may set deadlines for your response and payment. For example you may be required to pay within a number of business days of accepting the offer.
- If you refuse to pay, the scammers might try to intimidate you by threatening legal action or debt collection.
- The offer may use variations and copies of well-known logos, words, brand names, business names, pre-existing directories or websites in order to appear legitimate and convince you that the listing is of high quality and value.
- The offer may appear to be from a local or Australian business directory but often only an international contact phone number is given.
- The offer may state that you can only terminate the agreement by giving lengthy written notice, sometimes as long as three months. This written notice may have to be sent to an overseas address.
- Always check offers are legitimate and offer a quality product/service before you sign up. Search the wording of the offer or the company name on the web as many scams can be identified this way.
- It is important to check the legitimacy of all offers, whether they originate within Australia or overseas.
- If the offer includes an outstanding invoice, ensure that it is from a business that you normally deal with. If not it may be a scam.
- Check first: many small business scams involve fake invoices for goods or services that haven't been requested or provided.
- Never give or clarify any information about your business unless you trust the other party. Also ensure you know what the information will be used for.
- Try to avoid having a large number of people authorised to make orders or pay invoices.
- Beware of offers which come out of the blue and that you didn't ask for. Scammers almost always approach businesses in this manner.
- Do not let anyone pressure you into making decisions involving payments or ongoing contracts. Always get independent financial or legal advice.
- If you are interested in listing your business details in a legitimate online directory, research your options first. Online reviews and forums may help.
You can report scams to the ACCC via the report a scam page on SCAMwatch or by calling 1300 795 995.
See our small business scams section for more information.
Stay one step ahead of scammers, follow @SCAMwatch_gov on Twitter or visit http://twitter.com/SCAMwatch_gov
If you no longer want to receive SCAMwatch email alerts, please unsubscribe on the SCAMwatch website.