Bogus Invoices / Office
Businesses, churches, and fraternal and charitable organizations
are being bilked out of millions of dollars by bogus office supply
firms. 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 routinely order: 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
They 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 are often overpriced and of poor quality and
the services are usually worthless.
Schemers know that a business sometimes makes mistakes or can
be careless in its accounting, so they prey on these weaknesses.
Lifting names from mailing lists, business registers, the Yellow
Pages or published advertisements, swindlers send "pro-forma" invoices
for supplies and services. However, the invoice may be a solicitation
in disguise and in very fine print contain the following disclaimer:
"This is a solicitation. You are under no obligation to pay
unless you accept this offer."
Although the law states that it is illegal to send such a solicitation
without the disclaimer being conspicuous and in large print, there
are those who flout the regulations and send disguised solicitations.
Authorized Buyer Fraud
One goal of the phony-invoice scam is to get the name of an employee
before your organization is shipped and billed for unordered goods
or services. They use various ploys to do so such as 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 advertising
The phony invoice, which includes the employee's name as the "authorized" buyer, arrives a week or so after, for two reasons.
First, the inflated price, as much as ten 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
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 before they've used it.
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," meaning the carton
price is 10 times $19.95, or $199.50.
They can misrepresent the quality, quantity, type, price, or brand
name. For example, 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 full-carton price.
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.
He 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
If you send back the single toner cartridge they sent uninvited,
they may call up and say you kept one of the two they sent, so
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,
matching your equipment supplies, followed by a bill.
The gift-horse scam tries to create mistrust within an organization.
The scheme starts when the caller tricks an employee into accepting
a gift or a free promotional item, with a passing reference to
merchandise or services. You then 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.
They may also target a person with the authority to sign cheques,
then work on their fear of job loss, while sending escalating and
persistent invoicing, despite continued "last one" promises.
They may even threaten to notify higher-ups of the personal gifts
if the false bills are not paid.
Though they rarely blackmail people in this fashion, one scammer's
efforts eventually had several bookkeepers charged with embezzlement
with the continued use of the phrase "You still have a balance
due on your account!"
24 Hour Scamming
One group was charged for sending invoices to organizations, including
churches and non-profit organizations, for unordered computer repair
service contracts. Their mailings indicated that they were "renewals" or "upgrades of service" to previous contracts, or warned that an account
was "past due." Their solicitations also provided an
800 number for consumers to call for "unlimited maintenance
and repair services" including assistance by telephone. The FTC alleged that the defendants rarely, if ever, provided the promised services
One "toner bandit" scheme defrauded numerous medical
and dental providers who were induced to pay false and fictitious
invoices for high priced, unordered and undelivered copy machine
Supply Distribution Center set up customer service telephones
and mail boxes through which to operate the false billing scheme.
Fictitious invoices charging $274.95 or $283.92 for one carton
of unordered copy machine toner were printed and mailed out to
various businesses and institutions. About $14,000 in victims'
checks were deposited into their account while about $140,000 worth
were cashed at a liquor store.
Victims who complained about the invoices to them or to consumer
protection agencies had their invoices canceled in an effort to
reduce complaints and hide the scheme. No toner was ever shipped
to victims who paid the initial invoices. Instead, they simply
received another invoice billing them for another shipment of unordered
Willing To Clean You Out
Perpetrated through a company that
used the names of Sharp Industries, Saturn Industries, Polaris
Industries, Trans-America, and Chem Tech, one telemarketing scheme
defrauded thousands of victim companies including nursing homes,
churches, hotels, schools, hospitals and other organizations
nationwide out of over $12 million during a five year period.
They caused the victim companies
to pay exorbitant prices for maintenance supplies such as penetrating
oil, silicone spray, trash bags, and other products they ordered.
For example, a case of penetrating oil (12 cans per case) was
commonly charged to the victims at approximately $420 for one
case (12 cans - $35 per can), when the same product was purchased
wholesale for approximately $30 ($2.50 per can).
In addition to charging grossly
inflated prices to unsuspecting customers they would also send
gifts or kickbacks to the home addresses of purchasing agents
to induce them to pay the exorbitant prices charged on the sales
We Have To Keep Moving
Complaints from a real estate firm, a trucking company, a hospital,
a school district, and a non-profit agency describe phone calls
from a young woman, claiming that her father is closing his office
supply business in a nearby town and moving the business. She claims
the supplies are offered "at cost" or "very cheap," and
quotes specific prices.
The supplies are shipped, but the invoice amounts are higher than
expected. Totals have been reported of $292 to $1,922. In some
cases the original price quoted turned out to be "per item," rather
than "per box" and did not reflect the price quoted over
After the Invoice Arrives
Scam artists can spend significant time and energy on collection
efforts. They will 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, preceded by dunning letters.
An organization that pays for unordered goods or services also
may be targeted for additional scams or "reloaded." 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 convert to another bogus operation and target you
with a new scheme.
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:
The seller argues with you 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 court."
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.
How To Avoid Supply Scams
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, 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 mistake.
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
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
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 that person 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.
Ten Million Reasons Not To Realize
Edward Tunick, who faces seven to 10 years in prison for his January
conviction on nine counts of mail fraud in federal court, was involved
in telemarketing maintenance supplies for 12 years. By his own
admission, his companies, which ran under multiple names, tallied
gross receipts of more than $10 million in that period.
Suggesting that it took a jury trial to make him realize the error
of his ways, Tunick said he did not realize until after his conviction
that what he was doing was against the law.
He and his employees would call businesses offering products --
in his case, light bulbs and janitorial supplies, while avoiding
the subject of price during their calls. Posing as longtime suppliers
to the victim companies and often offering gifts to employees to
help persuade them to place an order, Tunick then would send the
products to one address and the invoice, with marked-up prices,
The scam works because large companies often fail to question
invoices below a certain dollar value, usually $500. Fraudulent
telemarketers know this so they keep sending bills for $200 or
27 Apr 2001
Thank you for having this web site!
I just got hit with this again today, and it's prompted me to write,
warning everyone about this telemarketing scam.
Several years ago, I was working as an office manager for an architectural
firm. One day I received a phone call from a guy who asked me if
I could confirm the model number of the copier in my office. He
acted very casual, as if he had been dealing with our company for
years. Not knowing any better, I gave him the information.
Shortly thereafter, boxes upon boxes of copier toner arrived at
my office. I had never authorized the purchase, but they had my
name, and sent the product anyway. The boxes weren't marked distinctively,
so I opened them to see what was inside. Mistake. As soon as you
open a box, you cannot refuse it to the shipper. So I was stuck
with a bunch of high-priced toner that I didn't want or need.
Let anyone who answers the phone for your company know about this
telemarketing scam. There are two approaches the scum-suckers usually
1) A person will call and say something like, "Hi. This is
Brian from the office center. Could you confirm the model number
of your copier for me?
2) A person will call and say something like, "Hi. This is
Jen from your supply center. I wanted to let you know that we just
got a major price hike on your copier toner. But since you're such
a good customer of ours, I'll make sure you still get it at the
old price. Do you still have the Canon M217 (they'll just make
up a copier model)?
As soon as you reply with, "What is the name of the company
you are calling from?" or "What information do you have
on our copier?" or anything that requests information of them,
they will hang up on you.
I've tried to bust these people, but have not yet been successful.
I've tried to do a "*69" (call back) on the phone, but
they always have their number blocked. I've also checked my caller
ID, but again, the number is always blocked.
When I got the packages that time, I tried tracing the return
address - it was a fake address. They must have gone into a postage
service center, used cash to pay for the shipping, and given a
false return address. And what about the invoice? A P.O. box.
Not sure what would have happened if I hadn't paid the bill, but
I DID give them my name and I DID give them my copier model number.
They could have argued that it was an authorized sale.
My point is, don't get yourself into this situation. If anyone calls
you asking you for ANY information - personal, business or otherwise
- DO NOT GIVE IT TO THEM! Ask for them to put their request in writing.
If they're legit, they'll do it.
Please forward this to anyone who works in an office. I think
this is important and could save people a lot of money and hassle
(and possibly save someone their job!).
Let's beat these scumbags at their own game!
No Fixed Address
Vermont Attorney General William H. Sorrell announced that his
office has settled a consumer fraud lawsuit against Merchant Product
Services (MPS)(3522318 Canada, Inc.), a telemarketing company based
in Montreal, Quebec run by its president and director, Misha Artzy.
MPS, a seller of paper and ribbon for credit and debit card machines,
had solicited orders by telephone from businesses all over the
country, using the Vermont address of a mail handling facility
in the town of Derby.
The Attorney General alleged that the defendants violated the
Vermont Consumer Fraud Act by:
||failing to disclose important terms
of MPS' offer, namely, the price and quantity of the supplies
that the defendants wished to sell.
||failing to provide required disclosures
of customers' three-day right to cancel their purchase over
||charging unconscionably high prices
for their products-between 5.4 and 11.0 times the prices of
comparable products sold by others.
||misrepresenting that MPS was affiliated
with the manufacturer of credit/debit card machines or served
such machines, rather than that it was actually a seller of
||misrepresenting the purpose of
the defendants' telemarketing sales calls by creating the impression
that their calls were intended to check on how potential customers'
credit and debit card machines were working.
Although the defendants denied these allegations they agreed to
a permanent ban on doing any business in or into Vermont, including
using a Vermont address.
They are also required to pay $21,000 in full refunds to all of
their Vermont customers; full refunds to all non-Vermont customers
who have filed-or who may in the future file-a complaint with the
State; $60,000 in civil penalties to the State; and $12,500 to
reimburse the State for its fees in litigating the case-for a total
of at least $93,500.
For further information on the settlement, businesses can contact
the Attorney General's Consumer Assistance Program at 1-800-649-2424.
October 9, 2001
Free Can Be Expensive
02/02 - James W. MacDonald, pleaded guilty to mail and wire fraud
conspiracies involving a $6 million dollar fraudulent telemarketing
company in Boca Raton and New Jersey and was sentenced to nearly
10 years in prison.
He told his telemarketers to offer businesses free samples of
cleaning and lighting supplies then later billed the companies
for the supplies at prices inflated up to 4,500 percent, according
to the U.S. attorney's office.
While the companies operated from 1989 to 1994, MacDonald was
arrested in 1999. Three others, Darren Sturtevant, Philip Lynch,
and Steven Green also pleaded guilty to the scheme and are awaiting
Clean up or Expect Abrasive Words
I received an invoice from a company that is suppose to be based
in Philadelphia, the invoice does not even have a telephone number.
The amount of the invoice is $ 408.91 for abrasive paper and HD
cleaner. I can see that the invoice was printed on a laser printer.
I tried the yellow pages, the web etc.. to locate this company but unfortunately
with no luck.
The company name is "Penn Paper Products" PO Box 11537, Philadelphia,
I contacted the Post Office here, they referred me to the Postal Inspectors
in Albany NY. The inspector did not want to know the name of the business
he only answered that it could be a scam and to mail the invoice to his
office which I did.
Danny Lafrance 02/04
One Percent Fine Not Likely to Deter Career
MONTREAL -- (CP) 05/07 - A Montreal man was fined $1 million Tuesday
for his role in a telemarketing scam that generated more than $136
million in fraudulent sales.
Michael Mouyal, 53, also received two years' probation and 240
hours of community service when he appeared in Quebec court.
Mouyal operated the scam under a number of names - Commercial
Business Supplies, Merchant Transaction Supplies, Merchant Supply
Services and International Business Directories -- in the six years
The case went to court following an investigation by the Competition
Bureau of Canada under the deceptive telemarketing provisions of
the Competition Act.
The scam operated from boiler rooms in Toronto, Montreal, and
St. John's, Newfoundland and Labrador.
As part of the scam, not-for-profit organizations, businesses
and government agencies in Canada, the United States and Britain
were contacted by telemarketers who claimed to be their regular
supplier of office supplies or business directories.
The callers they were contacting the victims to renew previous
Telemarketing Fraud Ring Selling Toner Office Supplies That Never
04/06 - OTTAWA - Criminal charges have been laid against two Toronto-based
telemarketing operations accused of billing businesses in Canada
and the U.S. for toner products that they never ordered.
The companies accused of the offences operated under the names
Lexan International Corp. and H&P Communications. Additionally,
Calcom Business Centre, Lexam International Corp. and MPL were
also business names used by the accused. Operations owner Edward
Harry Leefe, and office manager Shirley Herrell have been arrested
and charged with violating the Competition Act and the Criminal
Code of Canada.
The arrests were made with the help of the Toronto Strategic Partnership,
a group of policing organizations throughout North America, which
includes the Competition Bureau, Phonebusters, and the U.S. Federal
Individuals who think they may have been a victim of this crime
or any other deceptive telemarketing operation are encouraged to
contact the Competition Bureau at 1-800-348-5358 or online at http://www.cb-bc.gc.ca.