With so many businesses now trading online, an increasing number of small businesses in Australia are being ripped off by online scams. And if you think it can’t happen to you, be aware that many of these online scams are disguised as legitimate business transactions (see case studies below).
According to Victoria Police figures obtained by the Victorian Small Business Commissioner’s office, every minute in Victoria five small business operators are being targeted by online scams.
The Victorian Small Business Commissioner, Mark Brennan said yesterday that on average, small business operators in Victoria were being ripped off between $150 and $1000.
“Victoria is historically a major target for scammers, charlatans, crooks and conmen because we have always enjoyed a thriving small business sector,” Mr Brennan said.
The Office of the Victorian Small Business Commissioner (VSBC) has partnered with Australia’s fraud watchdog the Australian Competition and Consumer Commission (ACCC), to focus on the education and awareness of scams during Fraud Week between 1 – 7 March, 2010.
As a warning to other small business operators, Commissioner Brennan highlighted some recent scams being investigated by his office:
SCAM CASE STUDY 1:
One small business selling blinds online received several large orders from overseas. The orders were paid for with credit cards and included an amount for shipping costs. The purchaser asked the business owner to pay $3000 from the total payment it had received to an agent nominated by the buyer in order to arrange shipping of the goods.
The small business owner was later contacted by her bank as the credit card numbers were found to have been stolen. The bank then recovered the credit card payments leaving the business out of pocket for the $3000 it had paid to the ‘shipping agent’.
The small business operator was told she would have to recoup her losses directly from the shipping agent and of course, we all know there’s no chance of that happening.
SCAM CASE STUDY 2:
A small business was offered advertising in an online directory. The company offered a one month trial advertisement for $60. The business operator was advised that it needed to complete and sign a form before the listing could be placed on the directory. The small business operator signed the form and returned it to the company.
The small business received an email from the company a month later advising that as it had not cancelled the contract within 30 days it would now enter into a 36 month contract for a total of $1800. This amount had already been deducted from the business credit card.
When the small business queried this with the directory provider, it was advised that it had agreed to these terms when it signed the initial form. The small business was sent a copy of this form and discovered that these terms were buried in the middle of a large amount of text which it believed had related to the company’s code of conduct.
SCAM CASE STUDY 3:
A small business was contacted regarding advertising their business in a doctor’s surgery via a television in the waiting room. After giving details to direct debit their bank account and getting a contract faxed to them, they waited with anticipation for the expected upturn in their business. After a few months, they rang the doctor’s surgery and discovered advertising was never run on the television in the waiting room.
The small business contacted the VSBC for assistance. The VSBC contacted the company offering the advertising which claimed it was not aware of any problem with the TV. After representations by the VSBC, the company allowed the small business to cancel the contract without penalty.
To find out more about scams or to report a scam, businesses in Victoria can contact the VSBC on telephone: (03) 9651 9361, or visit the website www.sbc.vic.gov.au
Small businesses in other states can contact the ACCC on telephone: 1300 795 995 or visit the website www.scamwatch.gov.au
Source: Victorian Small Business Commissioner (VSBC)