Bogus IDBS Bills Designed to Defraud Businesses

The Better Business Bureau of Minnesota and North Dakota (BBB) is issuing a nationwide alert on IDBS, a nebulous online firm which purports to be a provider of web design, website development, and e-commerce services. The BBB has determined the company, which also does business as Internet Data Business Services, is sending phony invoices to businesses across the U.S, and advises business owners to be on high alert for these bills.

 

“This appears to be a clear-cut billing scheme,” said Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota. “IDBS sends phony invoices out in droves in the hopes that some portion of the businesses that receive them will just pay them, assuming they’re valid.”

To date, the BBB has received ten complaints against IDBS, which operates out of a UPS Store in St. Paul, Minnesota. Businesses who have received bills – for roughly $600 – from the company state they never contracted with them and received no services. IDBS has responded to all complaints brought to their attention by the Better Business Bureau so far and resolved them by agreeing to wipe out the alleged balances. However, the BBB feels this is a small concession as these bills are not real.

 

“It’s tough to give this entity too much credit for resolving complaints filed against them, when there is no transaction upon which to base the bills in the first place,” added Badgerow. “It’s like thanking someone to put out a fire which they started.”

The BBB and the Federal Trade Commission (FTC) suggest a few simple precautions to put a stop to paying for goods or services you haven’t ordered.

Designate certain employees as buyers. For each order, the designated buyer should issue a purchase order to the supplier that has an authorized signature and a purchase order number. These purchase orders can be electronic or written. The order form should tell the supplier to put that number on the invoice and bill of lading. The buyer also should send a copy of every purchase order to the accounts payable department, and keep blank order forms secure.

Train Your Staff. Advise employees who are not authorized to order supplies and services to say, “I’m not authorized to place orders. If you want to sell us something, you must speak to ________ and get a purchase order.” Establish a team of employees who order and receive merchandise or services and those who pay the bills to develop some standard procedures.

Check All Documentation Before You Pay Bills. If you receive merchandise, the receiving employee should verify that the merchandise matches the shipper’s bill of lading and your purchase order. Pay special attention to brands and quantity, and refuse any merchandise that doesn’t match up. Don’t pay any supplier unless the invoice has the correct purchase order number, and the information on the invoice matches the purchase order.

Know Your Rights. If you receive supplies or bills for services you didn’t order, don’t pay. Don’t return unordered merchandise, either. Treat any unordered merchandise you receive, like a business directory or even office supplies, as a gift. It’s illegal for a seller to send you bills or dunning notices for merchandise you didn’t order or ask you to send back the merchandise — even if the seller offers to pay the shipping costs.

Report Fraud. If a billing or directory scam has targeted your business, file a complaint with the BBB (bbb.org) and the FTC (ftc.gov). You also can report scams to the U.S. Postal Inspection Service and your state Attorney General.

The mission of the Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. We are open 8 a.m. to 5 p.m. Monday throughFriday. Contact the BBB at bbb.org or 651-699-1111, toll-free at 1-800-646-6222.

 

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