Managing Your Practice

Office Supply Scams


 

It doesn't occur to most physicians that a supplier might be ripping them off; but if adequate purchase controls are not in place, then it's possible, and even likely. Be aware of the common scams, how to avoid them, and the options if you're victimized.

Con artists take advantage of unsuspecting employees (and physicians) and lax purchasing procedures. Typically, the scam begins with a phone call from a “representative” who asks questions about the office and the supplies commonly ordered in bulk, such as paper, disposable gloves, printer cartridges, gauze pads, and cleaning supplies. (The caller might claim to be conducting a survey.)

The scammer might pretend to be a regular supplier who is “overstocked” on printer ink or toner. (Toner scams are so common that perpetrators are nicknamed “toner phoners.”)

Here is how this scenario might play out: You receive a shipment of poor quality merchandise you didn't order. Later, you receive an invoice for 5-10 times the amount you would pay a legitimate supplier for better quality supplies.

You can't be sure you didn't place the order, because you have no system in place for checking such things; your employees may have already opened the boxes; and you're under the mistaken impression that you have to return unordered merchandise or pay for it if you've started using it. (More on this later.)

Sometimes the caller offers your receptionist or office manager a free “promotional item” with “no further obligation.” Your employee figures why not, and accepts the gift. You receive overpriced unordered merchandise, followed by an invoice with the employee's name prominently displayed. The crooks are betting you will blame the employee, who you assume placed the order to get the gift (despite his or her denials), and now you have to pay.

Regardless of the method, the goal is the same: to get an invoice into your hands. Once that is accomplished, the scammers get very aggressive; they will dun you with letters and phone calls, send you to real or fake collection agents, and even threaten legal action.

You're at a disadvantage because you're not positive, and certainly can't prove, that you didn't order the supplies. And, if you pay the bill, you think maybe they will get off your back; however, you will only be targeted for additional scams. The scammer may even sell your “account” to other con artists.

Prevention is a matter of good organization and training. Put one person in charge of ordering supplies, and instruct everyone (including physicians) to tell all solicitors, “I'm not authorized to order anything or answer surveys. You'll need to speak to our purchaser.”

Instruct your purchaser to be suspicious of all cold calls and unfamiliar salespeople, and to never yield to pressure to make an immediate decision. If an offer appears legitimate, ask to see a catalog or printed price list before ordering anything.

Standardize your ordering procedure. Acquire a supply of purchase orders – electronic or written – and make sure one is filled out for every order, and every order is assigned a number. The employee who pays bills, ideally someone different from the one who does the ordering, should receive a copy of every purchase order. Keep blank order forms locked up or password protected.

When shipments arrive, verify they match the shipper's invoice and the purchase order. If everything reconciles, send a copy of the shipping invoice to your accounts payable employee. Bills for services should be reconciled the same way.

If a scammer still gets through your defenses, you have rights, and you should exercise them. According to the Federal Trade Commission, you are not required to pay for supplies or services you didn't order, nor are you required to return them. You may treat unordered merchandise as a gift. But you have to be able to prove you didn't order it, which should be easy if you use purchase orders.

The FTC has a good template of instructions for avoiding scams.

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