Workplace Compliance Scam
With the dawn of a new year, scams and spam letters can be hard to separate from real correspondences about bills and taxes.
A business planning client recently received the attached letter, which states that the recipient business must pay to file a report in order to stay compliant with Colorado law. Because the letter quotes Colorado business law in the first few paragraphs and directly references the client’s relationship with the Law Offices of Karen Brady, it’s easy to mistake it for a legitimate government correspondence. Further inspection, however, reveals it as an unnecessary service at best and scam at worst. With our clients’ permission, we would like to share some of the warning signs and preventative steps to help you stay away from scams in the future.
The Document Does Not Mention a Government Agency
If the government truly requires information or fees, they will contact you directly to tell you so. When you receive correspondence you think may be from the government, the first thing you should check for is a reference to a specific agency. Whether it’s the IRS or a local office, legitimate government documents will always state clearly which branch is contacting you as well as what response, if any, that branch requires.
This particular example does explicitly state that the sender “is not a government agency and does not have a contract with any governmental agency.” This disclaimer is tucked in the center of the page and easy to miss, which is almost certainly intentional. Furthermore, the document fails to mention which agency actually requires the “periodic report” they claim is required by law. Once you notice such a statement, or similar lack of reference to government agencies, you can usually dismiss the document.
Even in a document that claims to be from a legitimate agency, you will never be penalized for contacting that government branch directly to verify. If you are ever in doubt about the document, feel free to look up the cited agency on their website or call them directly. In the case of this client, they saw that the document mentioned Karen and immediately followed through with her, which helped them quickly eliminate it as a cause of legitimate concern.
No Names Are Mentioned
Most of us automatically ignore phone calls or mail addressed to “Current Resident” rather than a specific person. If they don’t care about the name of individual residents or business owners, it’s often because they’re soliciting money from anyone they can reach. This theory remains true in the attached example. Although the example document seems, at first, to know a great deal of information of the client, it never once mentions the name of the client or business owner. In a letter that knows something as specific as the client’s estate planning attorney, the omission of their first and last names is particularly suspicious.
The Information Requested Does Not Match the Stated Service
The document in the example claims that the service will file a report on the client’s business or property for a required fee. However, it does not provide an example of the form or report it claims to offer. The only information they request is a confirmation of the business address and “registered agent,” which they do not define. As noted above, they do not even request a name, much less contact information or any other information a legitimate government report would likely require.
Both scam artists and spam companies rely on your knee-jerk reaction to the first few words you read or hear. Before giving a suspect group your money or information, take a moment to think about the words you don’t read or hear. If something seems like it’s missing, or you don’t feel like you understand even a single element of the correspondence, it’s always worth the effort to follow through on research or asking for help. If you ever receive a similar correspondence, or you just aren’t sure whether information is legitimate, please don’t hesitate to follow your instincts and reach out for a second opinion.