Some scams you receive as a business owner are easy to spot. You know the ones, where they say that you are entitled to a large settlement or someone’s lottery winnings, or where a member of royalty from overseas needs your assistance with one thing or another. Hopefully, when you receive these emails you either hit delete or do an online search for “is this thing a scam?” to get a relatively quick answer. But many of the scams that business owners encounter don’t come in the form of an email and are very difficult to figure out. Since we operate as the registered address for many of our clients, thankfully we are able to intercept quite a few of these. Here is a list of the three most common business related scams we receive or have clients call about.
- Labor Posters – These mailings are often the first scam a business owner receives, since the companies that send them use lists of newly formed businesses to find their victims. The communication will generally inform the new business owner that they are now subject to certain Federal and State labor laws (which may or may not be true, depending on the business) and provides a form for the business to order them. What these mailings don’t tell the owner – these posters, if required, can generally be obtained or downloaded for free. Don’t fall prey to this scam, check the Federal Department of Labor or your state labor organization before you pay for anything.
- Corporate Compliance Notices – These notices generally do not show up when a company is first formed, but tend to arrive toward the end or beginning of a calendar year. They will often have statements about how maintaining records is vital to the existence of businesses, which may sound familiar to the business owner as attorneys often do (and should) tell clients about keeping annual records, etc. in order to keep their company in good standing. However, there are no official “corporate compliance” departments that verify this, and sending $125 and this form does nothing to ensure your business stays in good standing. These notices can be quite misleading, as they are designed to look like they are coming from an official state organization. Only a careful read of the entire document, or a search of the email domain listed gives a clue that this is a private company attempting to profit from a busy business owner’s quick read.
- Trademark Monitoring Services – If you’ve ever filed a Federal trademark application related to your business, chances are you received one of these notices. Because trademark applications are a matter of public record, these scammers target companies and individuals who have just filed an application with official looking correspondence that claims to help monitor or register the mark. The prices listed in these letters is often very close to the actual federal registration fee ($275 or $325) so can easily confuse an applicant. This practice is so common that the US Patent and Trademark Office has an entire section of their website dedicated to warning the public about these scams.
As long as there is public information, there will be people and companies trying to make a quick buck using that information. Protect yourself, and if you don’t have time or the patience to completely read a notice before sending money, send it along to one of your advisors to review and verify. And, in a pinch, always try a quick online search for “name of this organization or notice scam” before sending off a check.