SCAM ALERT: Minnesota businesses billed for advertising in nonexistent directories

The Better Business Bureau of Minnesota and North Dakota (BBB) are warning all businesses, but specifically businesses in Southern Minnesota, to be on the lookout for a bogus directory scam. The scam, which is fairly common, involves shady operators attempting to bill legitimate businesses for advertising space in nonexistent directories.

“Representatives from the supposed business directory – The Minnesota Directory of Unions – are contacting area businesses and informing them they will be stopping by to pick up a check for advertising in their directory,” the BBB said in a press release.

In one specific case, a business was told to leave a check for $289 “with the receptionist.”  An unidentified individual then visited the business the next day, but luckily the business declined to pay. The suspect left a receipt behind, which billed the directory as “The only local directory with no outside advertisers.”

“An online search for The Minnesota Directory of Unions performed by BBB revealed no results,” the BBB said. “The only contact information for the entity is a Yahoo email address and a phone number that won’t ring through.”

Tips to avoid scams

The BBB and the Federal Trade Commission (FTC) recommend these few simple precautions to put a stop to paying for goods or services you haven’t ordered:

Designate certain employees as buyers: For each order, the designated buyer should issue a purchase order to the supplier that has an authorized signature and a purchase order number. These purchase orders can be electronic or written. The order form should tell the supplier to put that number on the invoice and bill of lading. The buyer also should send a copy of every purchase order to the accounts payable department, and keep blank order forms secure.

Train your staff:  Advise employees who are not authorized to order supplies and services to say, “I’m not authorized to place orders. If you want to sell us something, you must speak to ________ and get a purchase order.” Establish a team of employees who order and receive merchandise or services and those who pay the bills to develop some standard procedures.

Check all documentation before you pay bills: If you receive merchandise or an unexplained bill, the receiving employee should verify that the merchandise matches the shipper’s bill of lading and your purchase order. Don’t pay any supplier unless the invoice has the correct purchase order number and the information on the invoice matches the purchase order, and don’t pay phantom bills.

Verify the local connection: Many directory or specialty advertising firms play on the local angle, sometimes claiming ties to area schools or business associations. Take the time to make sure that affiliation exists. Ask to see copies of previous directories or advertising supplements.

Report fraud: If a billing or directory scam has targeted your business, file a complaint with BBB (bbb.org) and the FTC (ftc.gov). You also can report scams to the U.S. Postal Inspection Service and your state Attorney General’s Office.


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