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The Telephone Racket
by Carasue Moody

My experience is that an honest person usually looks me in the eye when he or she speaks. It should be no surprise then that an abundance of fraud occurs over the telephone or via the Internet where graphics or voice trails provide the only clues about legitimacy. Cyber fraud gets a lot of attention these days; however, I would like to remind small business owners that there is an army of fraud technicians devising methods to scam you over the telephone every day. The business stands to lose both money and security. A basic self-protection strategy follows.

Most people are accustomed to getting calls from a wide range of telemarketers and service providers at home. Skepticism is natural at home because we usually have a tight control on who has the number and the National Do Not Call List has helped to dissuade and control those unwanted calls. So, when someone unknown calls to tell you that you have won a contest that you never entered, you question it. When someone says they have the best deal around but you have to act today, you question it. What we need to realize is that these calls or similar ones come in on the business lines every day. They are creative and convincing.

The first step in protecting your business against fraud is to learn about it. Keep yourself tuned into scam trends as reported through trade associations and publications. Educate your employees on the subject; and, require that any questionable telephone calls be reported immediately. Make sure that whoever answers your business telephone has been trained to be discerning in these matters. Keeping a log of the calls from gold and info diggers will help you and your employees spot trends and heighten awareness. When you hear or read about a rash of a certain type of scam, inform your employees immediately. Pass on what you learn and solicit stories of experience from your employees and colleagues.

The scammers usually want money, information, or maybe both. If they are looking for money, there is a set of warning signs to look for.

1.) You have to respond the same day.

2.) The caller acts like they have done business with you before, but you have no recollection of that.

3.) No written information is available.

4.) A fee is required before complimentary goods can be collected.

5.) A credit card or purchase order number is required over the phone.

6.) You won a prize without entering a contest.

When someone is looking for information, the warning signs are not as clear. Sometimes the caller is trying to find out how many computers you have in the office to see if your business is worth robbing. Sometimes they are looking for employee names for other mischievous reasons. Be particularly wary of callers claiming to be technicians when no service call has been placed. No legitimate technician will ask for passwords or security access codes.

To avoid being a victim of a racket, make company policy clear on the subject of what information may be shared over the telephone. Make transaction guidelines clear as well. If you or an employee does decide to accept an offer made over the telephone, be sure that standard good business practices are adhered to. Don’t make decisions on the phone. Take the time to research the company and perhaps other consumers of the product or service. You might even call the Better Business Bureau. If you do choose to do business with the company, document everything with cordial confirmation letters to avoid incorrect assumptions. Also, be sure that ordering limits and invoicing is consistent with company policy.

One last note of caution that I would like to send your way is that even reputable companies may have a degree of scandal in their deals. How many times have you gotten a call from a well-known long distance telephone service provider offering a great deal only if you accept the offer now? They count on the fact that you will be impressed with the small amount of information they provide you on the call; and, that you will switch providers in order not to miss out on the deal. If you keep a list of questions and your current rates next to the phone, you may be prepared for such a call. If not, you are forced to make an uninformed decision. In my opinion, if the deal is not available through the regular customer service operators, I am better off saying “No thank you”.

Anyone can be guilty of fraud, misrepresentation, or other damaging conduct, whether intentional or not. Telemarketers are the typical purveyors of falsehood; but, you should be cautious in every transaction. Misunderstandings happen in business just as in one’s personal life. Just a bad judgment call on the part of a colleague can have staggering effects on your business. While company policy needs to be clear on telephone rules when the caller is unknown, it also needs to be clear on how to do business with current product and service providers. There should always be follow-up to ensure that promises are kept and deadlines are met. Company policy on gifts should define limits on how much money, product, or service can be accepted for free. Free sometimes sets up an “owes me one” relationship.

The bottom line on protecting your bottom line is to stay ahead of the scammers. Growing a strong business requires some risk; but, be sure to do your best analysis work before entering into any new relationship. If you don’t take phone fraud seriously, it will surely take you.