Tricked in the trade: Email scams and what to watch

 

The way we do business is changing rapidly. Genuine opportunities can now come from a wide range of sources, including Internet enquiries from previously unknown entities.

Unfortunately, this has also led to a growing number of email-based scams targeting small businesses.


At NAPIT Legal we have noticed a significant increase in members asking us about offers of work they have received via email, and especially schemes where they are asked to pay an up-front fee in order to be added to a potential customer’s panel of tradesmen. Sometimes these schemes are genuine, but often they are not.

The way it works

We recently heard from a member who was contacted, through the details on the NAPIT website, by a company who said they had a large number of maintenance contracts in his area, and asked if he’d be interested in signing up to an exclusive list of tradesmen to carry out the necessary work.

The catch? In order to take advantage of this fabulous offer, the member was asked to pay a “membership fee” to the company of £3000.00 in advance of giving him any jobs to do. The member paid the money over the phone, and shortly afterwards received a contract from the company by email. He didn’t read the contract at the time, and he certainly didn’t read the part of the contract which said that the company was in no way liable for giving him any actual work as a result of his “membership” to their mailing list.

What happened next is, sadly, all too predictable. The member got no work at all from the company. When he chased the company for the work or his money back, he was initially fobbed off. After several heated phone calls, the company’s contact number was disabled, leaving him with no work and no refund from the company.

What should you do if you receive this kind of email?

If you receive an email offering you a certain amount of work in return for an up-front payment, then before you do anything else you should:

  1. Check the company out on the Companies House website https://beta.companieshouse.gov.uk/ - If the company is listed on this website then you will know that they are a legitimate registered company. The entry for the company will also tell you if the company is active (currently trading), how long it has been operating, and whether the company has any CCJs or insolvency filings against its name. It will also hold contact details for all the company’s Directors. Despite  the fact that the company is not registered should ring alarm bells, please note that just because a company is registered on Companies House, it doesn’t mean it’s definitely not a scam. 

 

  1. Ask around. Carry out a couple of routine searches to see if anyone has reported anything strange about the company. If they have a website, check it out. See if they’re operating in the area they say they are.  

 

  1. Contact NAPIT if you receive any email which mentions having found your details from their website. NAPIT will be able to confirm if they have any knowledge about the company and the way in which they operate and if not then it is helpful for this information to be reported so that other members can be made aware. 

 

  1. If you have serious doubts about whether the offer is genuine, you could consider reporting the issue to Trading Standards who may be able to launch an investigation into the Company on your behalf, or at least give you some more information about the company.

If you do decide to go ahead, you should always ask for the contract, check it carefully and make sure that you are happy with what you are being offered in exchange for your payment before you pay anything. Legitimate schemes often ask for a percentage of the value of the work you actually do rather than a large up-front fee, which is much less risky for you. Don’t be afraid to ask questions – after all, if the company is genuine and the work is there, there’s no reason for them not to answer you.

What if I’ve already paid the membership fee and got no work?

If you have been the victim of a “pay before you earn” scam, there are still some actions you can take although their success will very much depend on the exact facts of your case.

  1. Check the contract thoroughly; if it’s a genuine scheme that has just been unsuccessful, you may be entitled to a refund. Of course if it’s a scam it’s highly unlikely that you will find anything to help you in the contract.

  2. If you are worried that it’s a scam, report the issue to NAPIT immediately to spread the word and stop anyone else getting stung.

  3. If you think you have been defrauded, then you can contact Trading Standards who will decide on whether or not to launch an investigation.

  4. If you paid the initial fee on a credit card it is definitely worth contacting your card holder to see if they can claim back the money on your behalf

  5. Depending on the situation, you could bring a civil claim against the company for breach of contract or misrepresentation. NAPIT Legal would be happy to advise you further if you are considering doing this.

Our advice for dealing with “pay before you earn” offers is simple: Read the small print, check out the company, and ask around. If it’s too good to be true, it probably is.


Useful Contact Details

  1. NAPIT – 0345 545 0330
  2. NAPIT Legal – 0330 900 0720
  3. Companies House Website - https://beta.companieshouse.gov.uk/
  4. Trading Standards – 03454 04 05 06


If you're interested in any of the topics raised in this article, please contact Catherine Gritt. Alternatively, you can call to speak to one of the team on 0115 9888 777. 

 

 

 

 

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