Woes: Avoiding Web Service Scams
you're interested in using the Web to expand your small business, be cautious. Some
unscrupulous companies, claiming to provide free web design and hosting services, are
billing small businesses for services that were never authorized and have little value.
The bogus charges usually appear on businesses' phone bills - an illegal practice known as
"cramming" - or on fraudulent invoices.
You get a call from a company offering you a
free, 30-day website. They say you can continue the service for a nominal fee, say $25 or
$30 a month, and cancel at any time. Some service providers state that you'll be billed
automatically after the 30-day period; others claim you won't be billed after the 30 days
unless you tell them you want to continue the service.
Before or after explaining the offer, the provider asks
for basic information about your company: the address, contact person, business hours and
a brief description of the business. The provider says that your free website will be up
and running within a week, and that you'll receive a welcome package, which may include a
printed copy of the website, instructions for accessing the site, and a phone number to
call to make changes or cancel the service.
In fact, unscrupulous service providers bill you, whether
you authorize the services or tell the provider that you want to cancel. Also, many of the
services have little value. That's because these providers design and host sites that
contain limited information about the business, include misinformation or misspellings,
and lack important features. Moreover, most of the sites are not listed with major search
engines. If customers can't find your site, it's worthless to your bottom line. In
addition, you probably won't see the welcome package, but you will see the bill - either
on your phone bill or as a direct invoice.
Unless you review your monthly phone bills or invoices
carefully you could end up paying unauthorized charges for months before you notice the
Protect Your Business
You can protect your business from losing
money to unordered services. Here's how:
- Know your rights. If you receive bills for services you
didn't order, don't pay. The law allows you to treat unordered services as a gift.
- Review your phone bills as soon as they arrive. Be on the
lookout for charges for services you haven't ordered or authorized. If you find an error
on your bill, follow the instructions on your statement.
- Assign purchasing to designated staff. And document all
- Train your staff in how to respond to telemarketers. Advise
employees who are not authorized to order services to say, "I'm not authorized to
place orders. If you want to offer or sell us something, you must speak to
- Buy from people you know and trust. Authorized employees
should be skeptical of "cold" or unsolicited calls and feel comfortable saying
"no" to high pressure sales tactics.
Where to Complain
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
FEDERAL TRADE COMMISSION
FOR THE CONSUMER
You also may
want to share your experiences with other small businesses in your community to help them
avoid a rip-off.
The Better Business Bureau
also may be able to help you with your problem. You can file a complaint with the BBB by
using the online complaint form or by contacting the local BBB in your community.
This Business Alert was produced in cooperation with the
Small Business Administration, American Chamber of Commerce Executives, Better Business
Bureau, National Federation of Independent Businesses and Yellow Pages Publishers
Association. For more information that may be helpful to your small business, contact any
of these organizations.
American Chamber of Commerce
4232 King Street
Alexandria, VA 22302
Better Business Bureau
Contact your local BBB; look for the phone number in your telephone directory or contact
the Council of Better Business Bureaus, Inc.
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203-1804
National Federation of
53 Century Boulevard, Suite 300
Nashville, TN 37214
Administration Answer Desk
Yellow Pages Publishers
3773 Cherry Creek North Drive, Suite 920
Denver, CO 80209