Started a new Business? Beware of Scams!
By Paul Aguilar
As a business owner, you’re no stranger to the countless decisions and challenges that come with running a company. However, there’s a growing threat that every entrepreneur needs to be aware of: mail scams targeting businesses. These scams are becoming increasingly sophisticated, often disguising themselves as official correspondence or urgent legal requirements. By staying informed and vigilant, you can protect your business from unnecessary fees and potential legal troubles.
Common Mail Scams Targeting Businesses
1. BOI (Beneficial Ownership Information) Registration Scams
The Corporate Transparency Act (CTA) requires many businesses to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). Scammers are exploiting this legitimate requirement by sending official-looking letters demanding immediate payment for BOI registration.
The Truth: While BOI reporting is a real requirement, it’s free to file with FinCEN. Any letter demanding payment for this service is likely a scam.
2. Corporate Transparency Act (CTA) Requirement Scams
Similar to BOI scams, some fraudsters are sending letters claiming to be from government agencies, insisting that businesses must pay fees to comply with the CTA.
The Truth: The CTA is indeed real, but compliance doesn’t require paying fees to third-party companies. Official information and filing are done through FinCEN at no cost.
3. Other Common Scams
- Business License Renewal Scams: Letters demanding payment for renewing various business licenses, often at inflated prices.
- Directory Listing Scams: Invoices for listings in business directories you never agreed to join.
- Labor Law Poster Scams: Offers to sell government-mandated workplace posters at excessive prices, when many are available for free from official sources.
Red Flags to Watch For
Be on alert for these common tactics used by scammers:
- Official-looking seals or logos that mimic government agencies
- Urgent deadlines creating pressure to act quickly
- Threats of penalties, fines, or legal action for non-compliance
- Requests for sensitive business or financial information
- Demands for payment by wire transfer or gift cards
- Use of vague or misleading language about services offered
How to Protect Your Business
- Verify all requests: Before paying any fee or providing information, verify the request with the appropriate government agency directly through their official website or phone number. Ask EGBI staff. EGBI is willing to help if you receive any letter.
- Educate employees: Ensure that all staff members who handle mail and finances are aware of these scams and know how to identify them
- Stay informed: Regularly check official government websites and reputable business associations for updates on actual requirements and known scams.
- Use official sources: For any government filings or renewals, always use the official government websites or offices directly.
- Be skeptical: If something seems off or too good to be true, it probably is. Trust your instincts and do your due diligence.
What to Do If You’ve Been Scammed
If you believe you’ve fallen victim to a business mail scam:
- Contact your bank immediately if you’ve shared financial information or made a payment.
- Report the scam to the Federal Trade Commission (FTC) at ftc.gov/complaint.
- File a report with your local police department.
- Alert your state’s Attorney General’s office.
- Inform industry associations and nearby businesses to help prevent others from falling victim.
Conclusion
In today’s fast-paced business world, scammers are constantly devising new ways to exploit hardworking entrepreneurs. By staying informed about common scams, recognizing red flags, and implementing protective measures, you can safeguard your business against these fraudulent schemes. Remember, legitimate government agencies won’t pressure you for immediate payment through the mail. When in doubt, verify, verify, verify. Your business’s financial health and reputation are worth the extra effort to ensure you’re dealing with legitimate requirements and not falling prey to sophisticated scams.
Stay vigilant, stay informed, and keep your business safe from mail scams.
Find the Spanish version here.