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OFT publishes new advice to help businesses avoid the scammers

18/09    24 February 2009

The OFT has published new advice for businesses to help them avoid becoming victims of scams as part of its Scams Awareness Month.

Businesses continue to be targeted by scammers using deceptive and aggressive sales practices to con them out of hundreds of pounds.

The scams include 'free' listings in business directories where the victim unknowingly signs up to paying for repeated entries; businesses unwittingly agreeing to paying for adverts being placed in bogus 'charitable' publications; and companies being tricked into ordering unwanted and overpriced office supplies.

The advice, on the OFT's website, explains how the most common scams work, and offers tips to companies and their staff on how to protect their business from losing money to the scammers.

The OFT advises businesses to:

• designate authorised employees who can approve the purchase of goods and services
• never agree to anything in a rush, and remember that it is possible to enter into a legally binding contract over the phone
• carry out research on the goods or services being offered before you purchase, and
• find out more about the supplier before you agree to an order, and always remember to ask for a phone number, contact name and address.

Mike Lambourne, Head of the OFT Scambusters Team said:

'Scams cost UK businesses millions of pounds every year, which they can ill-afford to lose during the current economic downturn. When targeting businesses, the scammers are using increasingly sophisticated techniques, even recording and editing phone calls, and sometimes aggressively hounding victims into paying up. Scams are big business - don't let them cost you yours.'

The Insolvency Service's Companies Investigation Branch (CIB), which investigates complaints made against companies, has had a number of firms involved in charitable publishing scams closed down.

Claire Entwistle, CIB Deputy Inspector of Companies, said:

'The combined turnover of these companies was over £50 million, and we can be sure that this is just the tip of the iceberg.'

The Federation of Small Businesses (FSB) has welcomed the OFT's new advice, which also carries case studies and details on where to go for further help.

Mike Cherry, FSB Home Affairs Chairman, said:

'We welcome the OFT highlighting a range of scams, which are becoming a real and costly problem for small businesses. Our research shows that fraud and online crime such as phishing can cost a small business up to £800 a year, so advice on avoiding scams is very useful.'

The advice will be distributed to the business community via the Department for Business, Enterprise and Regulatory Reform, as well as the FSB. See the OFT advice to businesses pages.

NOTES

1. Scams Awareness Month is part of an annual international initiative organised by the International Consumer Protection and Enforcement Network. The OFT has enlisted the support of Local Authority Trading Standards Services, Consumer Direct, and other consumer and industry bodies.

2. The OFT is unable to give advice to individual businesses regarding disputes or obtain redress on their behalf.

3. 'Phishing' is a fraudulent process whereby the fraudster seeks to obtain sensitive information such as credit card details, passwords and user names with a view to exploiting such use for private gain. The fraudster does this by pretending to be a trustworthy source, such as a bank or usual supplier in an electronic communication purporting to be sent from the trusted source.

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