There are tons of things to think about and keep track of when you are starting a business. Putting together a business plan, bringing ideas from the drawing board to the table, figuring out all sorts of logistics, researching, planning, raising capital, marketing, legal stuff, you name it. The last thing you want to think about is being on the lookout for small business scams! But if you’re not careful it’ll cost you.
Forms, Filing, and Fees
Each state has its own rules and requirements for corporations and the self employed, and a lot of the time counties and cities have their own additional terms that have to be met. What a drag, right?! California and San Francisco especially have a lot, which I’ve learned first hand, and all of the forms and licenses can be aggravating to understand and remember to file on time.
But with running a business, comes a lot of responsibility, and slacking off on filing official documents can get very expensive. And even though you have more than enough on your plate with the incorporation process, getting your business off the ground, finding an accountant, a lawyer, employees, and suppliers, you must keep an eye out for small business scams.
Tricky, Dicky Traps
Whether we like it or not, a lot of information about us and our businesses is available for anyone to access through public records. Sadly there are plenty of malicious companies just waiting to get a hold of your business address and contact information so they can set all sorts of nasty traps for you to step in.
I almost fell for one of these tricks recently and boy did it tick me off. Here’s what happened… I started getting some annual documents in the mail from the California EDD (Employment Development Department). There’s nothing strange about this because the EDD is a vital part of legally operating a business in the state. And the EDD sends out publications and forms to employers regularly on payroll taxes, unemployment, disability, paid family leave, notices, etc.
The EDD requires California employers by law to display certain posters and notices on these state mandated benefits (UI, SDI, PFL), and businesses can face fines and even face lawsuits by employees if they aren’t compliant. I knew about these requirements though, so it wasn’t odd that I was getting mail from them. But a few days after a bunch of EDD mail, I got an ugly FINAL NOTICE saying I owed a fee of $275 related to one of these mandatory labor notices that was NOW DUE.
What now? Seriously?!
What?! Final notice? I never even got a first or second notice I thought to myself. I was in a rush, so I stuffed the letter in my bag and went back to work, fuming at myself for missing the filing deadline and also for this ugly, expensive fee I was facing. I was already irritated at the state for how much taxes suck and make me want to shut down my business, so this really got me fuming.
Later that night, I got out my checkbook and pulled the notice out of my bag ready to write more money away to the state. I looked the letter over again since I was a little more calm, and got a bit puzzled that this Labor Compliance office was located in LA. That’s kinda odd I thought to myself, since all the mail I’d received from the state prior to this letter came from SF or Sacramento.
Thank goodness this abnormality struck my curiosity and got me to start reading through the letter in much more detail. There was a big wordy section about all sorts of state requirements, yada yada yada,
some more stuff about some labor law poster, and then BAM the truth behind the mask “This is not a bill. This is a solicitation. You are under no obligation to pay the amount stated above unless you accept this offer.”
The Beauty In the Fine Print
WOW. I was thrilled I didn’t have to pay $275 bucks but boy did I swear like a sailor for several minutes at how much I wanted to smack the @$$3$ who put this deceptive notice together and tried to scam me into paying for something I didn’t need by disguising the letter to look like an official state notice.
Sadly I’m sure there are many small business owners out there who have fallen for these types of traps, and unfortunately what theses con artists are doing isn’t illegal. That doesn’t however make them any less slimy, foul, or vile for what they are doing. My advice – do NOT underestimate the importance of reading fine print before writing anyone a check or signing any type of document!
Other Small Business Scams
If you own a business, chances are you also own website which makes you even more of a target for deceptive notices like this. There are many loathsome companies that send out misleading invoices and letters to small business owners that make it seem like you have to urgently reply in order not to lose your domain, when in fact they are trying to get you to sign up for their registrar service that you don’t need, or are tricking you into paying for a new domain name that you don’t own but looks very, very similar to the one you do own.
So if you’re an entrepreneur running your own company, be on the lookout for small business scams and always, always read the fine print!!! You will save yourself a lot of money and headaches if you do your due diligence and listen to your gut when something seems even a little bit fishy.
Untemplaters, have you ever received a scammy notice before or know someone who did? How did you react? What steps are you taking to protect yourself from small business scams?
Latest posts by Sydney (see all)
- Pokemon Go Fever: Untemplater Income Report June 2016 - July 18, 2016
- What’s the point of life insurance? Here are the benefits! - July 11, 2016
- Loving money leads to financial independence! Mid-year 2016 net worth update - July 4, 2016