Identifying and Avoiding Business Scams in the Electronic Age

The news is filled with stories of individuals who have lost all their savings or family fortunes as a result of scams. Often businesses feel they are too savvy to be taken in by a scam. That is not always the case, especially when the scam purports to be a government agency. In this article we will look at scams that have become the nemesis of today’s businesses.

While it is clearly necessary to be watchful when using the Internet, the scams discussed in this article could also arrive at your office via mail or by fax. Electronic media including the Internet, faxes or other media provides scammers with a quick, inexpensive way to access a large number of potential victims. Generally, as a business person, you expect correspondence you receive that relates to your business, and looks official, to be legitimate. That assumption may not always accurate.

There are two areas examined in this article where businesses appear to be approached most often. The first is in the trademark renewal area, and the second is in regard to corporate filings.

Trademark Scams. Regarding trademark scams, the scammers take advantage of the fact that the U.S. government database enables the general public to access information regarding all trademarks filed with the U.S. Trademark Office including the identity of the trademark owner and other key information such as, the trademark registration data indicating when renewals may be due. Scammers access these public databases, download the key information and begin sending out notices to trademark owners regarding trademark due dates. The scammer then sends correspondence to the owner of the trademark soliciting money to prepare renewals for those marks. Conveniently the scammers include a place for you to provide credit card information for payment.

What does this correspondence look like? It all LOOKS very official. However, the U.S. Trademark Office does not send out renewal notices. The notice that you would receive may start with “UNITED STATES TRADEMARK MAINTENANCE SERVICE”. This heading is followed by the title of the action that needs to be taken regarding the mark. For example, it may be titled something like “SECTION 8 FILING/PENDING TRADEMARK CANCELLATION”. It all seems very official and certainly the word “CANCELLATION” will get anyone’s attention and create concern that, unless you send them a payment, your trademark is about to be cancelled which provides the incentive for you to act on this correspondence.

Seldom does the letter contain a street address. Rather it shows a post office box number. While the P.O. Box shown on the letter from this organization is in the U.S., the company named in the letter is not located in the U.S and the services are performed in other countries by non-attorneys and/or attorneys not licensed in the U.S. This is problematic since, as the U.S. Trademark Office rules state, “[o]nly licensed attorneys may represent you before the U.S. Patent and Trademark Office (USPTO). If you hire someone to represent you, he or she must be an attorney licensed to practice law in a U.S. state and be a member in good standing of the highest court of that state. Attorneys from other countries, except certain Canadian attorneys and agents representing Canadian filers, may NOT practice before the USPTO.” Therefore, even if the scammer does renew the trademark, the services they provided may not be valid because they were not properly licensed to practice before the U.S. Trademark Office.

In some instances we have worked with the U.S. Trademark Office to try to learn the source of this correspondence. The proliferation of scammers has prompted the U.S. Trademark Office to place cautionary notices on their website regarding the need to determine whether an organization is authorized to represent them before the trademark office.

Corporate Filing Scams. The second common scam relates to corporate filings. The scammers in this instance access state databases looking for dates that indicate when a company’s annual report may be due. The letter that you might receive looks very official, but again it is not. While there may be disclaimer on the notice that the scammer is not affiliated with the State, that disclaimer is in very small print at the bottom of the notice and, given the amount of detail on these notices, it is difficult to find the disclaimer. Even then it may not be clear that there is no affiliation with the state government.

If you receive notices of this type, please contact us and we can assist you in determining whether the notice is legitimate.

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