Beware the big bad wolf

1. Publishing scam: the one that never seems to die

This is one of the oldest scams - typically, a retailer will receive a phone call offering the chance to advertise in a publication being produced on behalf of a worthy cause, such as the emergency services. Even if they say no, the retailer is still sent an invoice. And when the retailer rings to complain they are told that the company has a recording of the retailer verbally agreeing the contract (usually through cleverly-worded questions). The retailer is then subjected to increasing threats to clear the debt.
These scams are often timed to coincide with busy times in a store and rely on the fact that retailers aren’t always clear about what they’ve agreed to. Luckily for Amit Patel, who runs Belvedere Food and Wine in South East London, the scam was clear from the start. “The first that I knew of it was getting a phone call from someone saying I’d agreed to an advert for my shop.” But when Amit questioned the salesperson further, he realised this couldn’t be the case. “When she gave me the date that I had supposedly placed this ad, I had been on holiday.”
He now says that while he does support charities, he never supports anything generating from a cold call.
Convenience Store’s Dear Jac columnist Jac Roper says that the worst thing about this type of scam is that it makes retailers wary of good causes. “The best way to keep your conscience happy is to tell the caller you will look at it favourably if proof can be provided through the post.”

2. Never do a voucher transaction over the phone

Another scam in the news again is the PayPoint technical trap. Retailers are called by someone purporting to be from the company’s technical team, saying there is a fault on the system. Through a series of ‘test transactions’ the scammers get away with thousands of pounds. When a member of Richard Cole’s staff was targeted at his store in Grantham, it cost him dearly. “I lost almost £2,000 in vouchers, which were cashed within 30 seconds of the phone call,” says Richard. The incident affected him so badly that he got rid of the terminal.
PayPoint’s Peter Brooker says that it’s often members of staff that fall for these type of scams: “These guys are very good at gaining your confidence.” Brooker says that PayPoint engineers will never ask retailers to do any transactions on the phone: “If we call it’ll be because you’ve reported a fault, but the most they’ll ask you to do is take the plug out of the back and reboot the machine, but will never, ever ask for codes.”
Brooker says that retailers need to train their staff to always check with the owner or PayPoint if they are called; always take money upfront from customers; and to never ignore the button on the terminal which asks if the customer is in the store. “If they are not present then you should never press it.”

3. Beware time-saving offers - they’ll cost you more in the long run

For the average time-poor retailer, companies offering time-saving solutions can sound like a sweet deal. But agreeing to these type of deals can often tie you into a contract that will cost you a lot more time and money to get out of.
Lynn and Andy Thurston of Gemco News, Braintree, Essex, jumped at the chance when a company offered to handle their employment issues for them at a time when they were having a problem with a member of staff. Says Lynn: “Before we knew it there was a rep on the doorstep who told us that they would do all of our HR and we would be able to get out of the contract at any stage.”
The selling technique was pretty heavy-handed: “The rep was there for three hours and every time we said that we wanted time to think about it he said that we could only get a certain deal if we signed the contract there and then.”
Once the deal had been signed all the promises seemed to disappear and the couple found themselves tied into a five-year contract without the level of service they thought they had been promised. “They said they had a 24-hour hotline, but it was an 0845 number and cost us money - and there never seemed to be any lawyers available to speak to, always advisers. And then they said we had to take out indemnity insurance for unfair dismissal. It just cost more money.”
When they tried to get out of the contract they were quoted more than £8,000 in fees. Through much haggling and involving the financial ombudsman they managed to get their contract reduced to a year.
Lynn says it was a lesson learned. “We felt such idiots, but now I realise that they offered nothing that we couldn’t have got from ACAS. Now we never sign anything without taking it away and reading it first.”

4. Don’t get caught out by dodgy deliveries and stationery scams

One of the most prevalent scams relies on confusion over who is authorised to accept deliveries. The scam can be in the form of a phone call whereby a staff member will be deceived into agreeing for the delivery of stationery with the trick of an agreement-seeking question such as ‘About those till rolls you ordered - we’ll deliver next week. Is that okay?’. The staff member presumes that they have been ordered and agrees.
A variation on this is a delivery just appearing with a note which must be signed. The unsuspecting staff member signs, not realising that by doing so they have entered into a contractual agreement to accept and pay for the delivery.
According to Jac Roper, “no one but the boss should be able to authorise anything”. She says retailers need to train staff to be wary of the agreement-seeking questions, and warns: “One retailer whose staff agreed to one got sent a box with a bit of rope in it and a torch, along with a bill for £20.”

5. Beware of men with official-looking identification

With the sheer amount of legislation that retailers need to comply with, it’s not surprising that the appearance of someone purporting to be from an official organisation can send you into a tailspin. Last year Warwickshire Trading Standards reported that ‘fire officials’ were carrying out unexpected fire safety assessments. On closer inspection these ‘fire officers’ were found to be salesmen trying to sell fire safety equipment.
Another con targets businesses which operate CCTV systems, saying that, as an operator of the CCTV system, they must pay £145 or face heavy fines. There is no such obligation under the Freedom of Information Act and any Data Protection Act obligation, where it exists, only ever costs £35.
One of the most active set of fraudsters are bogus health and safety ‘officials’, sending letters demanding money to register with an enforcement agency which will run checks on your business. Retailer Amit Patel says that he has been targeted more than once by someone claiming he may not be complying with electrical assessments. He gets rid of them by saying they do it themselves.
In all these cases the important thing is to not panic. If in doubt ring the official body that the official purports to be from. And remember, don’t rely on a quick flash of a card - really scrutinise ID.

6. Beware cold-calling rate reduction firms - you don’t need them

For many retailers, a rate increase can be cause for concern, which is why companies which offer to appeal rates can seem so appealing. The costs quoted by these cold-calling companies are £300-£500, which can seem tempting when your rates have gone up by thousands. Firms can also mislead businesses into thinking that the fees are refunded if the appeal doesn’t succeed.
While there are reputable rebate firms out there, the industry is crawling with cowboys. Contracts are often worded so that retailers will pay out whether an appeal is successful or not, and are offered without a proper inspection of the premises.
According to chartered surveyor Ken Batty: “Rating is a complex matter. It is not possible for any surveyor to state without inspecting a premises and going into the matter in-depth what savings can be achieved.”
He says that firms and surveyors should be a member of at least one, and preferably all, of the Royal Institution of Chartered Surveyors, Institute of Revenues, Rating and Valuation and the Rating Surveyors Association.

7. Equipment contracts can tie you in knots if you aren’t careful

The final pitfall isn’t so much of a scam as a salutary lesson in the importance of reading and checking contracts and not getting caught out by the dreaded rollovers. The scourge of thousands of businesses, these type of contracts can lock you in and cost you dearly.
Reps for these firms are great at pointing out the rewards to be had by using their equipment, but can be surprisingly vague about the finer details. Retailers can find that the promised dividends never materialise, and once they’ve finally got themselves out of the contract, which can take years, they have to pay out more to transfer the lease so they can finally own what is now an outdated piece of equipment.
Retailer Lyn Thurston found herself at the wrong end of a rollover contract with a Moneybox ATM when she failed to give six months’ notice of termination. “The problem is you’re just so busy you forget, and before you know it the date has come around.” The mistake almost cost the business £50k, with the contract rolling over for five years.
Jac Roper says that retailers have to be aware that all contracts are written in the client’s favour. “Always look at who it is with (supplier or a leasing/finance company), how long it is for, and the termination penalty clauses. If it’s a rollover then the retailer needs to make a diary note for when it is due and when the cancellation window is.”