Published: 18 June 2014

Summary: Find out what you should do when you receive an unexpected invitation to pay for services or goods that you never experienced or ordered.


Question: What are false billing scams?

ACCC Deputy Chair Michael Schaper: The essence of a false billing scam is that you receive an unexpected invitation, an unexpected invoice to pay, coming out of the blue for a service or goods that you've never really experienced or ordered.

And some of the ones businesses typically are approached about are listings in business directories, advertisements in magazines or journals, office supplies that they might not recall ever ordering, or domain name registrations or renewals.

One of the most common ones that we've seen for example in recent times has been the so-called 'Yellow Pages' scams, where businesses were receiving invoices for apparent listings in what they thought were the well known Yellow Pages directory, and in fact it turned out to be nothing of the sort.

Question: How many small businesses are affected by this scam?

Michael Schaper: Every year thousands of small businesses contact the website to report that they'd either fallen victim, or have been approached by a scammer.

And last year alone about three and half thousand small firms in Australia reported such an approach.

Fortunately the conversion rate, that is the number of businesses that actually fell victim is relatively low, about 450 businesses.

That said, those businesses lost about three quarter of a million dollars, and we suspect that there are many many more businesses that are either too busy, or sometimes too embarrassed to report when they do fall victim.

Question: How can small businesses protect themselves from this scam?

Michael Schaper: The first thing is to ask yourself is this invoice the real deal? Is this so-called business that's sending me the invoice legitimate?

And there are a number of ways to do that: For example you can go and find, ironically enough, on a legitimate directory, see whether or not this has got a bona-fide phone number and contact them.

A second thing though is also to check and see, ask yourself, is my business scam free?

Is it fraud free? Am I doing everything that I can to ensure there are no scam opportunities being presented?

So for example, have I got the latest IT software protections in place?

Have I got a system in place in my business so when a bill comes in, it isn't automatically paid without at least someone going back to check and see that you genuinely ordered something.

And the third thing is to also make sure that you are not intimidated.

That is to say, if a scammer rings you, demands money, that your first reaction isn't simply to pay it.

Most business operators wants to do the right thing by their suppliers, so they are inclined to pay it, but the first thing to ask yourself is, why is someone demanding money for something that I just don't recall ordering?

Question: What should a small business owner do if they think they have been scammed?

Michael Schaper: If you've been scammed, the first thing to do is ask yourself whether or not you've lost money?

And if you have, you need to report that to the police. 

You also need to contact your financial services provider.

It may not be possible in all cases, but sometimes it may be possible to recoup at least a part of the money that's gone. It's certainly worth making that enquiry.

The next thing that we would ask you to do is also contact

Apart from being a useful source for scam alerts, it's also a vital part of the system we have in place for detecting and reporting scams. So your information will help us.

Thirdly is to also advise other people in business who you think might also fall victim to this scam.

And that might be for example advising your industry association, because there is a good chance that other members of your industry are also being scammed, as well as other people that you know.

Forewarned is forearmed.

[Know who you're dealing with - don't pay a scammer's false bill.]