BEWARE: SMALL BUSINESS SCAM

Protect your business

It is a challenging time to be a small business owner as the entire world pauses for the Coronavirus. Sales have screeched to a halt for companies, big and small, in nearly every industry across the board. So now, more than ever, we need to be on the lookout for the dirty-rotten scammers and thieves who prey on the desperate situation many of us find ourselves in.

Like most other small business owners, our family’s sole source of income is from the sales we generate. That is why, even though we’ve avoided dozens of scams up until now, this one had us momentarily reeled-in.

Our company, 469 Design, is a small web design firm located here in Tooele. We were contacted through our website on Thursday 3/26, by an individual calling himself ‘Hutton Miller’, asking for a quote. After receiving the written quote, he was ready to get the project started immediately and make a payment. This is where the scam starts:

Can I Ask A Favor?
Mr. Miller asked if we could do him a favor because both his consultant and marketing company, who would be collaborating on the project with us, were having trouble with their payment processors. He asked if we would process the payment for $5000 over our agreed-on costs and then submit payments to them on his behalf.

RED FLAG!
Now, because we know this sale will help keep our little company afloat until things get back to normal – we still have hope that maybe there is some sort of miscommunication or reasonable explanation. We insisted on setting up a phone meeting so we could talk through everything and let him know why we can’t forward any funds from an ‘overpayment’ to a third party. He reluctantly agreed.

The phone call was chaotic, he did not speak even one legible word and the background noise sounded like a call center from half-way around the world. He hung up after about 30 seconds.
From this point on there were a flurry of emails and texts as we were trying to get the necessary information to set up an account in our system and process his payment. But he became increasingly agitated that we would not run his Discover Card immediately.

Reality, and Disappointment Sets In
What a disappointment! It felt good to know we would be able to stay busy and have financial security throughout the pandemic. So, we decided to call the Tooele City Police Department (TCPD) to report this encounter. Officer Reyes responded almost immediately.

The Scam
After we explained the details, the officer said that he’d seen this stolen credit card scam played out before;

  • The credit card payment is processed through your merchant account and you receive the funds.
  • Then, as per your agreement with the scammer, forward the over-payed amount to the third party via credit card, check or cashier’s check.
  • In a day or two the credit card company will notify you that the credit card was stolen and you will be required to return the full amount charged to the card and the scammer gets away with your money Scott-free!

Officer Reyes went on to explain that he’d seed this scam recently and the victim lost $2000 of his own money. He said he wished business owners would use more caution in times like these to avoid being taken advantage of. Unfortunately, there isn’t anything TCPD can do because the call was not locally made.

A call to Discover’s customer service wasn’t helpful either. There were no results for a search within their system for a customer named Hutton Miller. Without any further information, there is nothing they can do.

Small Business Owners Beware!
Officer Reyes did suggest that we tell our story through social media to alert other small businesses and hopefully prevent this scammer from stealing thousands of dollars and most likely destroying your company and livelihood in the process.