How to avoid acquisition fraud: 5 tips
- How to
- 2 Jun 2023
- Edited 7 Jul 2022
- 3 min
- Managing and growing
- Secure business
In 2021, 1 in 10 businesses in the Netherlands encountered acquisition fraud, according to research conducted by the ministry of Economic Affairs and Climate Policy. Unreliable advertisement agencies approach your business via telephone or email to sell you advertising space in magazines, company guides, or on websites. You pay for the ads or listings, but they rarely get placed. How do you avoid this trap, and what can you do if you have been misled?
Acquistion fraud is also known as advertising fraud. Fraudulent parties make you agree to a , without your noticing or actually wanting to. For example, you think you are signing a document to verify your address details - but it turns out to be an agreement. Or you agree verbally to something that turns out to be a fake offer. Examples are an offer for unlimited use of VC models or a subscription to a website or app. Stay alert, and avoid acquisition fraud with these five tips.
Acquisition fraudsters often use aggressive sales techniques. The following situations are common:
- The fraudster pretends you already have a business relationship. All you have to do is 'check the company details' in a fax or email, and confirm these with a signature. If you do this, you will find out later that you were actually signing an agreement.
- The scammer asks you if you are interested in paying to prolong the free mention of your business on their website. If you say you are not interested, they tell you to 'quickly sign the fax or email'. But your signature binds you to an agreement that will cost you money.
- You are contacted by phone with the question: do you want to sponsor a charity publication at a one-time low rate? If you say yes, you end up stuck with a costly, long-running subscription.
Delivering on a promise
According to the law, a failure to deliver on a promise constitutes fraud. In many fraud cases, the service provided does not match your expectation. But once you read the contract carefully, it turns out the fraudster has done exactly what the agreement states. That makes it very difficult to prove that you were duped. The Unfair Commercial (in Dutch) prohibits aggressive and deceptive sales promotions. Without prior approval, companies are not allowed to call other companies for an offer. Since the (in Dutch) of 1 July, 2021, this protection also applies to consumers and to personal legal forms such as sole proprietorship, general partnership, and partnership.
Use these 5 tips to avoid falling prey to acquisition fraud.
1. Do not just say yes
In a first sales talk, do not agree to an offer or cancellation. Never make verbal promises and always have the offer sent to you on paper. This gives you the opportunity to consider the offer properly.
2. Know what you are signing up for
Pay attention to what you are signing for. Never just sign and return a fax, email, or letter. Pay attention when an email asks you to confirm your details. The small print may mention you are entering into a contract.
3. Do not sign without a written confirmation
Never sign for advertising space if the seller does not want to give you written confirmation of the print run, distribution area, and defined target audience. Also check whether the ad agency has general terms and conditions, and if so, whether these contain a cooling-off period or conditions for return or dissolution.
4. Check the seller
After the first phone contact, check whether the seller, the ad agency, really exists. Look up the business in the Business Register (in Dutch). Also check the company's reputation on the internet. Can you find any complaints about the business?
5. Be alert to fake invoices
Look out for fake invoices, also called a 'spookfactuur'. Check your records to see if there have been previous dealings with the sender of the invoice. Always read invoices thoroughly, including the small print.
What if you were duped after all?
Did you say yes to a fake offer, and have you received an invoice?
- Do not pay for it. Write to the other party to explain why you will not pay. You can request the recording of the telephone conversation from the provider to find out how the conversation went. The provider must prove that there is an agreement.
- Read the general terms and conditions of the ad agency or other party. Sometimes, you are allowed to cancel an agreement within a number of days.
- Consumers are protected by the legal . Entrepreneurs are not. Perhaps you can have the agreement voided on the grounds of deception (in Dutch). The agreement can also be dissolved on the grounds of non-performance.
- Do not be intimidated by collection agencies. Some collection agencies collaborate with fraudulent ad agencies.
- The ad agency can take you to court. Present a solid written argument, and be pro-active. Hire to help you.