Home > Uncategorized > How to Avoid Office Supply Scams

How to Avoid Office Supply Scams

As a professional in the office equipment industry I constantly hear horror stories from clients about past experiences with toner and office supply scams.

I recently discoved this guide from the Federal Trade Commission online and I thought that it was great information.

Please read this carefully and protect yourself.

Could your organization be a victim of an office supply scam?

If you don’t have adequate purchasing controls, probably so.

Businesses, churches, and fraternal and charitable organizations are being bilked out of millions of dollars by bogus office supplyfirms. You can protect yourself by learning to recognize the scams and understanding your rights.The typical office supply scam involves goods or services that you routinelyorder: copier paper, toner and maintenance supplies, equipment maintenance contracts or classified advertising. When fraudulent telemarketers call, they often lie to get you to pay for items you didn’t order, or to get you to pay more than you agreed to. How? The caller may falsely claim to be your “regularsupplier” or to tell you that the offer is “special” or “good for a limited time only.” Con artists take advantage of holes in your organization’s purchasing procedures or of unsuspecting employees who may not be aware of office practices. What’s worse, the office supplies peddled by these bogus firms often are overpriced and of poor quality; the services usually are worthless.

The Scams

Office supply scam artists generally use three ways to take your money — the phony-invoice, the pretender, and the gift-horse.

Phony-invoice Scams

The goal of the phony-invoice scam is to get the name and address of an employee so your organization can be shipped and billed for unordered goods or services. The invoice includes the employee’s name as the “authorized” buyer. Scam operators use various ploys to get an employee’s name: They may call asking for help completing an order, claiming that “the accounting department lost the name of the person we should send these supplies to,” or they may ask for the name of the person in charge of your Yellow Pages advertising.

Once the con artist has an employee’s name
and address, he’ll ship the unordered merchandise.
The phony invoice arrives a week or so
after — for two reasons: First, the inflated
price — as much as 10 times what you’d pay
for the same goods from a legitimate supplier
— is less obvious if the invoice arrives after the
merchandise has been received and stocked.
Second, the chances are good that you’ve used
the merchandise before the invoice arrives.
Many organizations mistakenly believe that
they must return unordered merchandise or pay
for unordered merchandise if they’ve used it.
A twist on this approach may have the fraudulent
seller timing a phony invoice to match
your purchase of legitimate services from
another vendor. For example, the seller sends
you a bill for unordered classified advertising
soon after your ad runs in a legitimate publication.
The scam operator hopes you’ll be confused
and pay his bill instead of, or in addition
to, the one from the legitimate company.

The Pretender Scam
In the pretender scam, the caller may pretend to
be your regular or previous supplier, a replacement,
or an “authorized” supplier. By convincing
you that the goods or services and prices
offered are the same as before, the caller hopes
you won’t bring up prices, quantities, and
brands. Even if you do, the seller may try to
brush you off by saying, “We’ve supplied you
in the past, but it’s been a while,” or “The
price is the same as last time.” If you insist on
a price quote, the seller may give a price that
sounds reasonable for one carton but is actually
for a single unit, such as “$19.95 in a carton of
10.” Translation: the carton price is 10 times
$19.95 — or $199.50.
In one variation on this scam, the caller misrepresents
the quality, quantity, type, price, or
brand name. For example, the ribbons for your
IBM typewriters may not be IBM brand ribbons,
or the toner for your Xerox copier may
not be Xerox brand toner. Some scam artists
try to duplicate brand name packaging; others
sell half a carton of merchandise at the fullcarton
price. Similarly, sellers of Yellow Pages
advertising may actually represent fly-by-night
outfits that distribute few, if any, telephone
In another twist, the caller uses high pressure
tactics to rush your purchase decision and
dodge questions about price, quantity and brand
names. The seller may falsely claim that prices
are going up soon, someone was forced out of
business, a warehouse is overstocked, or a
limited inventory of government surplus is
available. Or that a computer glitch delayed
notification of a price increase, but, as a courtesy,
an order has been reserved for you at the
“regular” or “old” price.
Or, the seller may misrepresent the purpose of
the call, saying that he’s calling to send you a
promotional item such as a cordless screwdriver,
free samples, or a catalog so you’ll
“think of him next time you order.” Or the
seller may claim that he’s conducting a survey
of office equipment or updating company
records, leading you to believe that he’s the
regular or previous supplier. Before hanging
up, the caller may mention — in passing —
actual merchandise. “I’ll send that screwdriver
to you right away … and while I’m at it, I’ll
throw in a few deodorant blocks.” Soon, a
shipment arrives, followed by the bill.

The Gift-Horse Scam
The gift-horse scam tries to create mistrust
within an organization. The scheme starts when
the caller tricks an employee into accepting a
gift — a free promotional item — with a passing
reference to merchandise or services. You
receive overpriced unordered merchandise,
followed by an invoice with the employee’s
name. When the organization questions the
employee, the fraudulent seller is betting that
the employee will be nervous about the gift

when he denies placing the order. The hope is
that the organization will doubt the employee.
When this scheme works, the organization
believes that the employee blundered into
ordering something that must be paid for.
After the Invoice Arrives
Scam artists spend significant time and energy
on collection efforts. They send as many
invoices as it takes to get your money. Invoices
often are stamped “Past Due.” In extreme
cases, they’ll resort to real or bogus collection
agencies and threats of legal action.
An organization that pays for unordered goods
or services also may be targeted for additional
scams. This practice is called “reloading.” For
example, the seller may send a second shipment
of “back ordered” merchandise and another
bill, or bills for service upgrades. Additional
invoices follow as long as you continue to pay.
The con artist also may sell your organization’s
name to other scam operators, or move to
another bogus operation and target you with a
new scheme.

The Brush-Off
When organizations complain that they didn’t
order the merchandise or services or that the
price is too high, the scam seller reacts in some
predictable ways:
✏Bullying. The seller argues if you express
any uncertainty about whether the supplies
or services were ever ordered: “They were
ordered. We have a recording of Mr. Jones.
If you don’t pay, we can take you to
✏Negotiating. Here, the seller agrees to
accept a lower price. After all, the goods
and services are so grossly overpriced that
almost anything the seller gets is profit. If
you complain about price, the seller may
say, “You were charged what? They must
not have given you the discount for ….”
The seller then tries to negotiate “a better
deal.” Sometimes, the seller appeals for
sympathy: “We really need the business.
I’ll let you have it for….”
✏Charging for returned merchandise. The
seller claims you can return merchandise if
you pay a “restocking fee.” In fact, the fee
is often more than the goods are worth.
Similarly, the seller may try to get you to
pay shipping charges to return the items.

Protect Your Organization
You can protect your organization from paying
for unordered goods and services. Here’s how:
1. Know your rights.

If you receive supplies
or bills for services you didn’t order, don’t
pay, and don’t return the unordered merchandise.
You may treat unordered merchandise
as a gift. By law, it’s illegal for a
seller to send you bills or dunning notices
for unordered merchandise, or ask you to
return it — even if the seller offers to pay
for shipping. Further, if the seller sends
you items that differ from your order in
brand name, type, quantity, size, or quality
— without your prior express agreement —
you may treat the substitutions as unordered
merchandise. Unordered services are treated
the same way. However, first consider the
possibility that the seller made an honest
The Federal Trade Commission’s (FTC)
Telemarketing Sales Rule offers additional
protections in business-to-business sales of
non-durable office or cleaning supplies and
most sales of goods or services to individuals,
groups, or associations. The Rule
requires telemarketers to tell you it’s a sales
call — and who’s doing the selling —
before they make their pitch. They must tell
you the total cost of the products or services
they’re offering, any restrictions on getting
or using them, and that a sale is final or
non-refundable before you pay. It’s illegal
March 2000
1-877-FTC-HELP http://www.ftc.gov
Facts for Business

2. Assign designated buyers and document your purchases.

For each order, the designated employee should issue a purchase order — electronic or written — to the supplier with an authorized signature and a purchase order number. The order form should instruct the supplier to note the purchase order number on the invoice and bill of lading. The buyer should send a copy of every purchase order to your accounts payable department. Keep blank order
forms secure.

3. Check your documentation before paying
bills. When merchandise arrives, the receiving employee should verify that it matches the shipper’s bill of lading —paying special attention to brands and
quantity — and your purchase order. Refuse
merchandise that doesn’t. If everything’s in
order, the employee should send a copy of
the bill of lading to your accounts payable
department. Bills for services should be
reconciled the same way. A supplier should
not be paid unless the invoice has the
correct purchase order number and the
information on the invoice, the purchase
order and the bill of lading match.
4. Train your staff.

Train everyone in how to
respond to telemarketers. Advise employees
who are not authorized to order supplies
and services to say, “I’m not authorized to
place orders. If you want to sell us something,
you must speak to __________ and
get a purchase order.”
Buy from people you know and trust. Authorized
employees should be skeptical of “cold” or unsolicited calls and feel comfortable saying
“no” to high pressure sales tactics. Legitimate
companies don’t pressure you to make a snap
decision. Finally, consider asking new suppliers
to send a catalog first.
Where to Complain
Report office supply scams to the FTC, your
state Attorney General, local consumer protection
office, or Better Business Bureau. In
addition, you may want to share your experiences
with other businesses to help them avoid
a rip-off.
The FTC works for the consumer to prevent
fraudulent, deceptive and unfair business
practices in the marketplace and to provide
information to help consumers spot, stop and
avoid them. To file a complaint or to get free
information on consumer issues, visit
http://www.ftc.gov or call toll-free, 1-877-FTCHELP
(1-877-382-4357); TTY: 1-866-653-
4261. The FTC enters Internet, telemarketing,
identity theft and other fraud-related complaints
into Consumer Sentinel, a secure, online
database available to hundreds of civil and
criminal law enforcement agencies in the U.S.
and abroad.
Your Opportunity to Comment
The National Small Business Ombudsman and
10 Regional Fairness Boards collect comments
from small businesses about federal compliance
and enforcement activities. Each year, the
Ombudsman evaluates the conduct of these
activities and rates each agency’s responsiveness
to small businesses. Small businesses can
comment to the Ombudsman without fear of
reprisal. To comment, call toll-free 1-888-
REGFAIR (1-888-734-3247) or go to
for telemarketers to misrepresent any
information, including facts about the goods
or services being offered.

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