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14 Mar

Easy Access to Information Results in Increase in Business Scams

By Firm

March 14, 2013

How many times have you asked yourself “what did we do before email and the internet?” Businesses today rely on the World Wide Web for fast, cost-effective and reliable transmission of information. The information superhighway not only spawned legitimate business enterprises, but also brought us closer to the wide world of web scammers. Unfortunately, the con artists are getting more and more sophisticated, making it harder to separate the real from the thief.

On the back page of a recent Consumer Reports (you know, that page where people send in goofy or deceptive ads) there was an item that really caught my eye because it’s one I’ve seen before. It was a copy of a very official looking letter to a trademark applicant, telling them that a $375.00 processing fee was “NOW DUE” to the United States Trademark Registration Office. Unfortunately, you had to search out the tiny print to see that the “United States Trademark Registration Office” has nothing to do with the US Trademark office, and that the “monitoring service” was not legally required. The US government doesn’t have a “United States Trademark Registration Office.”

We work with clients on trademark registrations, and some of them come to us with these letters, which, of course, makes me worry about the ones who don’t. We warn our clients about these misleading mailings, but these look so authentic, I can only assume a few have fallen victim without my knowledge. There are people out there who monitor filings and send these notices, and they would probably argue that they offer a legitimate service for a fee. But if it were so “legitimate” why would they need to try to trick people into thinking they are dealing with the official US Patent and Trademark Office?

Closer to home, a firm called Corporate Records Service has been contacting businesses, suggesting they needed to pay a $125 fee for an “Annual Minutes Form.” Although very official looking, it’s nothing more than a scam to get businesses to pay unnecessary fees to “file” unnecessary documents. No such “form” is required, and although it made the news, several of our clients received it and were smart enough to call us about it before they succumbed.

Last summer, area homeowners were targeted, this time by a company offering to provide “grant deeds” for a fee of $86.00. The notices were very official looking, and sometimes included the words “FINAL NOTICE.” The letters warned homeowners that they needed to obtain this “grant deed” in order to confirm their ownership of the property. While apparently not illegal, they certainly were misleading, because the “grant deeds” were not necessary to prove ownership, and any doubt could be removed by a low-cost search of public records. You had to read the fine print to see that the service was not a bill, and that the same information could be obtained from the County Recorder or Register of Deeds.

And businesses are only the latest victims. Unwitting citizens and the elderly have long been targets of the unscrupulous. I received a call from a woman a few years back who had paid $1,500 to an entity in Canada, who promised to provide her with a loan. She sent the money, and naturally never heard from them again. And there was story in the news about a man in Oregon being scammed out of almost $160,000.00, after someone posing as a State Department official told him that his granddaughter had been arrested in Mexico and needed the money for her defense.

I have similarly been the recipient of emails that purport to be from a friend who was traveling in Europe, which said she had had her belongings stolen and needed money to get things straightened out and come home. I’m not sure how they do it, because this really appeared to be from my friend. Thankfully, I knew better, and had a laugh with her about her “travel catastrophe.” Unfortunately, she also said she got distressed calls and emails from some people who thought it was real. Scam artists know just where to hit.

Even law firms aren’t immune. There was a scam going around a couple years ago, where a seemingly legitimate business sought legal assistance to resolve a contract or collection matter. Lo and behold, the other party had just agreed to settle and send the money, the original business needed a lawyer to draw up the settlement agreement and hold the payment in trust until the papers were signed. They would try to have this occur quickly and get the law firm to forward the payment before the banking system could tell them that the cashier’s check they received was phony. Thankfully, I think most law firms knew better than to send funds until the first check cleared, but the swindlers keep changing their tactics until they find a con that works.

Now the flimflammers have found a new way to play on people’s trust. This one involves using seemingly legitimate law firms to run interference. It has been reported that a Tennessee man found a boat on Craigslist. The “seller” wanted the money paid to an escrow account managed by a Brookfield law firm. By now, you know the routine. There was no boat and there was no such law firm. According to a recent news release, an Illinois consumer lost $20,000 in a similar scam. Perhaps consumers are getting savvier, because the scammers are now taking it one step further. The State Bar of Michigan reports that recent fraud attempts have used real attorney names and legitimate looking websites when instructing buyers to deposit money into trust accounts. It’s frustrating, but it seems the best consumers can do is try to be vigilant, and make a few calls before making the payment.

Most people I know can see through all the malarkey, but I feel badly for those that fall victim to the con-artists, particularly the elderly whose only wrongdoing is to trust. So while you are busy looking out for yourself, if you have elderly parents gently remind them that there are people out there just waiting for the opportunity to separate them from their money, and that there is no shame in taking a step back and asking someone else if whatever it is seems legit.  This pertains equally to businesses, who may need to remind their staff to scrutinize the mail and not move things to the “accounts payable” pile too quickly. If you aren’t 100% certain, ask. If it is legitimate, no harm done. If it isn’t, you can take pride in knowing you are helping to deprive a few low-lifes of a living.

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About the author

Haley Palmersheim, S.C., is a business law and business litigation firm located in Madison, WI and serves South Central Wisconsin, including the counties of Dane, Sauk, Jefferson, Rock, Dodge and Marathon. Our firm offers legal service from a business litigation attorney or small business attorney specializing in a wide range of business-related practice areas.

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