Scam Alert! - Industry Trend or Event

Home Office Computing, April, 2001 by Dan Costa

In a similar case, the FTC found that International Business Network Inc., based in Tarzana, Calif., would call businesses on some phony pretext to obtain information about their victims' photocopiers and the names of personnel responsible for ordering supplies for the copiers. They used this information to convey the impression that they regularly supplied toner for the victim's copier. Once the victim paid one bill, additional shipments and bills were sent, reflecting outrageous prices.

The FTC settlement in this case banned the company principals, Danny Yahalom and Oren Ben Elkanah, from telemarketing sales and required them to pay $85,000 to the business owners they had ripped off.

WATCH THAT WARRANTY

Another similar scam revolves around sales of big-ticket items such as computers and copy machines. Horowitz says users should be particularly wary of computers that were assembled or rebuilt outside the United States. Even if the components are delivered as advertised, the warranty may be invalid and leave you hanging if you run into trouble. "Manufacturer warranties on these systems will not be honored because they were assembled in Europe," says Horowitz.

In fact, the source of your warranty may be as important as who made the product. Federal law guarantees you the right to read the warranty before you buy a personal computer, according to Horowitz. "You want to make sure to get a factory warranty," he says. "Dealer and third-party warranties are troublesome because they don't always perform their own repairs."

The Federal Trade Commission offers a number of tips for small businesses that want to avoid becoming victims of office supply scams. Clearly, you are not responsible for products that you did not order. In fact, the law allows you to treat them as a gift! When shipments arrive, you should inspect them immediately to ensure you receive the quantity and quality of items that you ordered. You should also check your bill for charges for items you did not order.

MASTER OF YOUR DOMAIN

One relatively new scam involves the selling of bogus domain names. Although many top-level domain names (TLDs) are taken, the Internet Corporation for Assigned Names and Numbers (ICANN) is in the process of authorizing new TLDs, such as .biz, .info, .pro, and others.

According to the FTC, consumers are receiving fax and e-mail solicitations to secure new top-level domain names--for a fee--as soon as they become available to the public. The promise may guarantee a new top-level extension or some kind of preferential treatment in the registration process; either way, the claims are bogus.

At press time, however, ICANN had not yet authorized the new extensions, and the FTC says it is misleading for any service or entrepreneur to offer pre-registration or accept fees for domain names that may never exist. It is also likely that ICANN will establish rules and regulation regarding the distribution of new TLDs when--and if--they become available.

The FTC advises consumers to protect themselves by avoiding any pre-registration service that asks for fees up-front or guarantees particular top-level domain names or preferential treatment in the assignment of new, top-level domain names. It also recommends that consumers look carefully at any offers that come in unsolicited. To check the current status of new TLDs, check out the ICANN Web site at www.icann.org.