Invoice scams are as old as business itself, no doubt opportunistic cavemen tried to scam other hunters over made up debts and Phoenician traders had to deal with suppliers claiming they’d delivered an extra few hundred Shekels of chickpeas.
Today we see these scams in all forms – imaginary invoices for web registrations, directory inclusions and local listings are just a few we’ve seen. As the web evolves, we’re seeing a new breed of tricks developing.
Online scams can range from things like letters from deposed African presidents promising riches through to aggressive sales folk promising services they can’t deliver. The latter are part of the new breed.
In 2009 Oakland’s East Bay Express alleged the review site Yelp’s sales teams were threatening business with bad reviews if they didn’t pay an advertiser fee. Four years later businesses are claiming this is still happening.
Regardless of the truth of these allegations with Yelp these distatesful sales tactics from online companies are becoming more widespread.
As social media services investors start demanding revenue to back their businesses and group buying sites reach the limits of their growth the sales teams of these organisations are desperately try to find new ways to meet higher targets.
Small and local businesses are the obvious targets of the sales teams, as the web 2.0 business model has trained consumers into expecting not to pay for online services.
Recently a fitness trainer told me how she was hounded into placing a group buying deal with one of the bigger sites; they convinced her that she should offer an 85% discount with the service taking the remaining 15%.
She provided the service for free.
Naturally the 85% off deal was successful, she was rushed off her feet and found herself working for nothing over the next month. Even had the cheap offer resulted in all the customers coming back, it would have taken her a year to recover her losses.
Clearly she should have known better and investigated how group buying sites work and the strategies for using them effectively, but she was subject to high pressure sales techniques that took advantage of her ignorance.
Many online businesses have been giving services away for free as they try to exploit the Silicon Valley greater fool business model. When the venture capital funds dry up they have to find to new ways of paying for their trendy offices with foosball tables and free organic staff meals.
This means more cold calls to business owners promising “marketing opportunities”, “getting to the top of Google” and “getting positive online reviews”.
Over time these sales calls will morph into fake negative reviews and bills for imaginary services rendered as these businesses attract desperate and unscrupulous operators.
For businesses, this means it’s a time to be on guard by making sure any invoices received are properly checked before they are paid and any sales person’s claims are thoroughly checked out before you agree to go ahead with a service.
If you hear of dodgy dealing like what Yelp has been accused of, then try to get the promises in writing and complain to your state’s fair trading department or complain to business agencies. In Australia, the ACCC is the first point of call.