Phone scam targets small businesses

It sounded too good to be true.  An order for 70 filet mignon for Mandy and Danny Weigel at The Junkyard Dog could have meant a nice profit.  But as she listened closely to the order she quickly began to suspect a scam.

And she was right.

The Better Business Bureau warns small business owners that reports of scammers plying their trade through telephone relay services — typically used by the hearing impaired to make phone calls — are cropping up all across the country. At a time when businesses literally cannot afford to fall victim to fraud, this scam is experiencing a comeback and small business owners should take precautions to avoid losing thousands of dollars.

And this one occurred right here in Hohenwald.

The relay operator transmitted the message from the TTY caller, instructing Mandy to charge the credit card with the cost of the meals, add a $100 bonus for her time, and take an additional $1,200 to purchase a money gram to mail to the caller as a “favor.”  Mandy’s suspicion saved her thousands and the stolen credit card owner more.

BBB has received reports from many types of businesses that received suspicious orders through TTY or telephone relay services. These services are meant to assist the hearing impaired in making telephone calls and often rely on an operator who relays a typed message from the caller to the business.  Because, by law, the operator is not allowed to disclose the origin of the call, this service allows the scammers to hide their identity.

“With many small businesses struggling to stay afloat in these tough economic times, the old adage ‘buyer beware’ only addresses half the issue,  because we’re seeing increasingly that sellers need to beware as well,” said Steve Cox, BBB spokesperson. “The use of telephone relay services to scam small businesses isn’t new, but is seeing a comeback, which is why owners need to know the warning signs or risk becoming the next victim.”

The scam being employed over telephone relay is a variation on an overpayment scam. A business receives an order from a customer over the phone through a telephone relay service. The customer will explain that the delivery service they’d like to use won’t take credit cards and asks that the business wire money to the shipper and simply tack the cost onto the overall order and charge their credit card for the total amount.  Any money wired to the supposed shipper, will actually end up in the hands of the customer/scammer and the credit card number provided is stolen. Not only does the business suffer the loss of the goods or services ordered by the scammer, it will also lose whatever money was wired to the phony delivery service.

Businesses that are being targeted by this scam vary. BBB has heard from caterers and restaurants in Washington and Idaho, transmission shops in Tennessee, and awning companies in Colorado, who all received calls from scammers using relay services in the last couple months.

Two calls were placed to the office of the Lewis County Herald requesting advertising, but were disconnected by the caller when it was learned the office did not accept credit cards.

BBB offers the following advice to business owners to help identify fraud over telephone relay services:

• If the customer is using a TTY Relay Operator ask the customer for his/her full name, address and telephone number.

• Ask the customer to provide the name of the issuing bank and its toll-free customer service number as printed on the back of all credit cards.

• Ask the customer for the three or four digit Card Verification Code that is found near the account number on the back or front of a credit card.

• Tell the customer that you will check with the bank and call them back. When you do that, keep good notes. Verify all information the customer provides. If a customer objects, explain that these procedures are for their protection, as well.

• If the customer still objects to providing any of the above information, abandon the conversation and advise that you are not prepared to do business this way.

Reports of Relay Call scams appear online, easily found through search engines.

The old adage still rings true:  if it sounds too good to be true, it probably is.