Scam Alert – Invoice Scam

Scam Alert - Invoice Scams

If you are operating a business then I need to warn you about the invoice scam. Sooner or later you will be thrown the bait. The question is whether you will grab it and get hooked, or whether you will smile and rip the bait off the hook and throw it straight in the bin.

There are certain actions which you will take that will become public knowledge, whether you like it or not. When you establish a business you will need to register it. In countries such as Australia the business registration becomes available to the public if they know where to look. If you register a domain name for your business then this information also becomes publicly available. Checking the ownership of a domain name is as simple as doing a WHOIS, for example. If you launch a new product or develop an idea you may decide to patent some or all of the idea or concept or invention. Once again, this becomes public knowledge, but on a much larger scale – on an international scale.

All of the items I mentioned above require renewals and payment. In Australia registering a business costs money, not much, but it still costs and the business name needs to be renewed every few years for a small fee. I invented an educational product a number of years ago and had that patented. It was a ten year patent and registration as well as renewal incurred a fee. The same is true for domain name registration and so on.

Can you see where I am going here?

Renewals, fees and public information are three good ingredients for a scam.

I never did receive an invoice for my business name renewal other than from the government agency that was responsible for governing this. However, my patent was a different matter. Every few years I used to get an invoice from some weird international patent agency that was (supposedly) based in Switzerland, which I had never heard of. The invoice was for inclusion to some international patent directory which was supposed to protect and expose the product idea and patent to the world – for a fee!! From memory the invoice was for an amount of well over $1000. I did a little research into this area and have found that this is, in fact, a very common scam. In trying to dig up the company trying to scam me I came across The Swiss Federal Institute of Intellectual Property whose registers of intellectual property are the only ones which are legally binding. The Institute has provided the following warning:

Owners of trade marks, patents and designs sometimes receive offers or invoices for useless entries in registers and directories. As entries in private registers or directories are legally ineffective, we strongly advise against their use.

SOURCE: The Swiss Federal Institute of Intellectual Property

The link provided above also provides a huuuuuge list of fake scam companies and “untrustworthy providers”. I didn’t even know there were that many, and those are the only ones who present themselves as being from Switzerland. As the Swiss Federal Institute of Intellectual Property warns:

Monitor critically who you empower to administer your protection rights and do not authorise any unknown person. Whoever signs the often official-looking documents without critical examination or pays the relevant invoices could be in for an unpleasant surprise.

SOURCE: The Swiss Federal Institute of Intellectual Property

I received invoices from internet service providers who offered to renew my domain name before it expired. Whilst they were not actually scams, they are quite deceptive. In Australia your hosting company will give you ample warning about the expiration of your domain name. However, these other service providers sent invoices well in advance with text that was written in such a way that made one assume that if one did not renew early there would be a chance of losing access to the domain. It was also interesting to note that these very caring domain hosts were usually quite a bit more expensive in their domain registration. So if I wasn’t on the ball, I could have easily made the mistake of renewing the domain nice and early for an excessive premium and be moved to a new hosting provider without even realising it.

Finally, there is the business directory. Every so often my business used to get calls from a very nice lady who wanted to confirm the business details for inclusion into a business directory. Lucky that I answered these calls :)

There was never any problem. All she wanted to do is to confirm the postal address, whether the business had the same domain name and location address. She had these details on file and stated the details to me. It’s just that she needed to confirm them to ensure that all the information would be up to date for the current edition of the “very popular” business directory. Yes, yes, yes, it was all fine. The nice lady said she would email me a brief of the small ad which would go into publication for me to confirm and email back. I’m listening and listening and hear no mention of fees. So innocently I asked her whether this was all a free service. “No”, was the answer, but “don’t worry as you won’t need to pay anything for a couple of months as the cost of a few hundred dollars will be invoiced later”. Hehe. I was not concerned about the timeframe for payment, as you can imagine. I just didn’t want to pay AT ALL.

I thanked the lady and wished her a nice day. Below is the link to the directory where my advertisement would be displayed for a fee of a few hundred dollars:

Australian Business Pages Directory

Have a nice day.

Peter Solanikow
Peter Solanikow
Peter Solanikow is a tertiary educated and qualified business consultant and options trader based in Melbourne, Australia.
Peter founded A1 Tuition, an education resource provider, in 1997 at the age of 23. Peter has written a number of educational books as well as presented seminars in accounting and economics.
Over time Peter developed an interest in business management and has assisted hundreds of clients from various countries around the world in management, marketing, strategy and finance matters.
Peter travels to Europe annually and has knowledge and experience in business matters relevant mainly to Poland.

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