Modern scams and how to beat them

By Rich Mintzer

updated 1:05 p.m. ET Feb. 1, 2007

They contact you by phone, fax and e-mail. They’re ready with invoices for you to pay, services for you to order and P.O. boxes to collect your money. Modern scammers have thought of everything: The only thing that stands between them and your money is keen awareness on your part.

What types of scams are most popular these days? From overpayments that need a refund to inquiries about selling your business, the following “smart” approaches are luring even cautious entrepreneurs.

A ‘heavy’ prepay shipping scam
“As soon as the TTY operator told me the call was coming from Nigeria while the woman had me on hold, I knew something was up,” notes Bruce Webber of Webber Floor Covering in Maple Heights, Ohio. Webber had received calls from TTY operators before, working on behalf of the hearing impaired. In this case, it was a call from a woman who wanted to order tile for a church in Alaska. But when she put him on hold for a few moments to try to send him an e-mail, Webber commented to the operator on the lengthy wait.

“I’m not sure if she did it on purpose or just let it slip  … typically they don’t tell you where the caller is calling from, but she did,” says Webber, who had read in a floor-covering industry magazine that such scams were going on. The idea of using a TTY operator is to make the call untraceable and possibly to play on the sympathy of the victim, who believes he or she is helping someone with a hearing disability. When Webber told the operator he didn't realize the call was from overseas, the caller overheard him and quickly got off the line. She never rang back.

“It’s a prepay shipping scam,” explains Eric Appleby, director of electronic sales and marketing for Ohio Valley Flooring in Cincinnati, who had heard of the scam from several colleagues “They give two credit cards to the retailer — both are valid and go through. Of course, you find out later that they’re stolen credit card numbers. Then they order heavy items to bring up the shipping charges and ask you to prepay the shipping to a P.O. box at a distant location,” explains Appleby, adding that they often select special order items that the company will have a harder time disposing of, making the victim more likely to front the shipping bill for the big special order.

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The TTY prepay shipping scam has been reported to various better business bureaus by lumber companies, furniture dealers and other businesses that sell heavy items that result in high shipping charges.

Smart Tip: Don’t ship any products to a buyer on a prepaid basis unless you’ve done business with the company previously or can verify the legitimacy of its payment method.

The overpayment approach
For David Rosenbaum of Real Time Computer Services in Armonk, N.Y., taking a personal approach with his customers has been key to the success of his computer consulting business. “We build a relationship and have a degree of trust with most of our clients,” says Rosenbaum, who’s even carried a few familiar clients who had cash flow problems in the past.

It was this trustworthy nature that allowed Rosenbaum to get caught off guard several years ago by an Alabama-based outfit that ordered software from him and sent a check to cover the costs. Because the company had paid several hundred dollars over the total cost of the software, Rosenbaum sent them a check with the order to make up the difference. Only later did he find out their check was from a bank account that had been closed years earlier.

“I didn’t mind sending the software, but they took money from us on top of that,” says Rosenbaum, whose new policy is to return an overpayment check immediately, uncashed, and ask for a check in the proper amount.

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