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Beware of 'directory listing' scams

24 May 2017

For some years now, medical practices have been a favourite target for scammers.

Not for the first time, it appears that members have been hit with another ‘directory listing’ scam. These scams usually offer a worthless listing for your business in an online directory and use misleading paperwork to lock you into costly fees for the listing.

How do scammers operate?

Scammers know when to be very friendly and charming to engage you, then turn aggressive to intimidate you into paying. They know how to make it look like their paperwork is above board. They know how to create a fine line between an outright scam and a legitimately purchased (but worthless) product or service.

Often if you don’t pay they will threaten legal proceedings, although in reality most won’t proceed to court as they don’t want to be exposed.

A technique often used is where scammers will lie about what has been said on the phone, to discredit or trick you or your staff. This is a current trend we are seeing, where scammers will send through what seems to be legitimate looking paperwork, but they will follow up with a phone call in which they will lie about what it actually means. Their phone conversation can never be traced, but the paperwork you sign can be. That’s the ‘sleight of hand’ – the heart of the scam.

The latest directory scam that some members have been caught by is an Australian online directory that targets reception staff, who are told by a friendly person over the phone that they are ‘just updating your details’ on a listing that apparently already exists.

They will then send a fax through that will usually have minor errors in it, so the receptionist makes corrections. This gets the receptionist to engage with the material and make markings on it and ‘action’ it. The receptionist is much more likely to ‘sign off’ on something she or he has corrected by hand. It all appears genuine and above board. It also distracts the person from the fine print.

The paperwork is usually headed with something like ‘This is not a bill – you don’t have to pay any money.’ That’s reassuring, but then the small print will explain that money does indeed have to be paid, if you sign. Scammers know that very few people read the fine print.

The company peddling this scam has covered themselves legally on the face of it, with pricing and a statement (in very small print) that once you sign, you are entering into an agreement. It will refer you to its terms and conditions (on a website) that appear genuine, and have been carefully crafted to cover a range of legal scenarios.

It is a classic case of an unscrupulous business targeting reception staff who are often young and inexperienced, making it seem like they are simply updating details, when in fact they are ‘committing’ the practice to significant expenditure.

Misleading or deceptive conduct

Section 18 of the Australian Consumer Law (ACL),[1] prohibitsconductby corporations in trade or commerce which ismisleading or deceptiveor is likely tomisleador deceive.

It is illegal for a business to make statements that are incorrect or likely to create a false impression. The overall message is important. Businesses can't rely on small print and disclaimers as an excuse for a misleading overall message. A business can’t claim that its intent was honest, if it was in all the circumstances misleading.

The AMA’s position is that where this ‘semi – legitimate’ looking paperwork is accompanied by a phone call assuring the innocent receptionist that they are ‘just checking details’, the overall impression is misleading, so this is likely to mislead or deceive for the purposes of the ACL.

We would urge members not to get caught out.

Things to watch out for:

  • People who ‘cold call’, making contact with you out of the blue to discuss your ‘listing’. They make it sound like you already have a listing but it is in fact simply a ‘proposal’ and by signing it, you are accepting it.
  • People who insist that someone in your practice has previously authorised a particular purchase. This is a classic scam.
  • People who tell you that you should sign a document, but 'it isn't binding'. If anyone wants you to sign something, it is usually intended to be binding.

 How can I protect myself from scams?

  • Scammers usually want a signature on a piece of paper. Do not be rushed into signing anything.
  • Do not give your credit card or bank account details to any person unless you are absolutely sure they are legitimate.
  • Train your staff to recognise problems and potential scams. It is often junior staff that scammers target.
  • Make sure you have clear procedures in your practice around who can sign for purchases or indeed who can sign any document on behalf of the practice. A co-signatory – insisting that two people check and sign anything before it goes out - is good practice.
  • You may find it helpful to refuse cold calls, just like you can refuse junk mail. Of course, make sure you are not hanging up on patients.
  • Check a company’s ABN or ACN on the ASIC website. This is not a guarantee of legitimacy but it means a company is registered in Australia and may at least by traceable.
  • Check with other practices or colleagues in your area to see if they have dealt with the company in question, and what their experience has been.
  • Check sites such as ‘Scamwatch’ http://www.scamwatch.gov.au and ‘Moneysmart’: https://www.moneysmart.gov.au/scams/avoiding-scams which provide information on scams.

What should I do if I think I have been scammed?

  • Report it to the Fair Trading authority in your state or the Australian Competition and Consumer Commission (ACCC). Consumer protection agencies can put together a case where there is sufficient evidence and occasionally get a significant legal victory against a scammer.
  • Put a stop on any payments from your bank account or credit card
  • Let others know about it, including your staff
  • Mostly scams do not attract the attention of the police. It is agencies such as the ACCC and Fair Trading which deal with scams. But if it is particularly serious and involves serious fraud or other criminal activity such as threats, you should report it to the police
  • Cease communicating with the scammer
  • Contact your local AMA
  • You may need private legal advice
  • Have any of your staff who were involved (such as talking to scammers over the phone) write and sign a statement setting out exactly and factually what happened while it is still fresh in their memory. This may later prove to be valuable evidence against scammers.

The Australian Consumer Law can protect you from certain types of unscrupulous dealings, but once you have paid up, it can be very difficult to get your money back. A full legal challenge can cost a lot of money – usually much more then you have paid out, so may not be cost effective.

Remember you have to remain vigilant about scams. Scammers are thinking up new and creative ways every day to get money out of you.

The AMA is not suggesting that every company which approaches a medical practice is acting unethically or unlawfully. There are many legitimate suppliers in the commercial world who act honestly and ethically. We are, however, saying that you should take a moment to educate yourself and your staff to spot a potential scam and avoid it.

 

John Alati

Senior Industrial and Legal Advisor

 



[1] Competition and Consumer Act 2010, Sch 2


Published: 24 May 2017