They may look like invoices sent to business owners for posters they may need to display in their workplace.But we think they are andVoice – A deceptively worded solicitation that attempts to sell companies readily available free posters. An enforcement action just settled by the FTC and the Florida Attorney General provides recommendations for protecting your business from this form of B2B deception.
According to the FTC and AG, four defendants with ties to Texas and Florida — Starwood Consulting, Starwood Capital, Corporate Poster Supply and Thomas Henry Fred, Jr. — sent letters to businesses across the country , with the intent of tricking them into paying $84 for posters about labor practices. To round out their pitch, the letters look like invoices from government agencies or other authorities and warn recipients that they have two options: 1) purchase the $84 poster; or 2) face a hefty fine. In fact, posters similar to the one in question are available for free from relevant government agencies. But according to the lawsuit, many businesses mistakenly believed they had to buy the products from the defendants and spent more than $84.
The proposed settlement in the case includes provisions to prevent the defendants from using similar tactics to harm consumers in the future, including a ban on unsolicited direct mail. The $6 million judgment will be partially suspended pending the payment of $1.2 million based on the defendant’s financial circumstances.
What steps can other businesses take to protect themselves from B2B scams?
What is your logo? Do some research first. If you think you may need to post signs, please check with the relevant government agency. But please do not use the phone number or URL listed in the request you received in the mail. Do your research and visit legitimate .gov sites for more information.
Consider free options. Indeed, some agencies may require businesses to post signs on their premises regarding topics such as labor practices. But if you need a poster, you can probably get it for free from the agency’s website. The Department of Labor’s FirstStep Poster Advisor is a helpful resource that can direct businesses to industry-specific posters required by the agency and provide signs to employers at no cost. You can order online, call the agency to request a free copy, or even download and print it. Why pay for something your business can get for free?
Reminder to business colleagues. Are you active in an industry association or local business group? Let them promote similar solicitation practices and other forms of B2B deception to their members, including fake office supply invoices and fake phone calls claiming that your company will be shut down if you don’t pay immediately. Read the FTC Handbook Scams and Your Small Business (also available in Spanish) to learn how to spot B2B scams.
