Scammers are exploiting a web-based operator-assisted phone service for persons with hearing and speech impairments to try to rip off unsuspecting businesses, including promotional products companies.

Jon Van Buren has experienced the scheme firsthand. The president of Minnesota-based ImprintItems.com (asi/164612) told ASI Media that his distributorship was targeted with 13 such con calls in a three-day span during the week of April 2.

Van Buren spotted the attempted hoodwinks and didn’t fall prey. Still, he said distributors need to be on their guard because the crooks are aggressive and could be targeting others in the branded merchandise space.

“It’s very underhanded, what they’re doing,” Van Buren said.

The Scam Explained

The Federal Communications Commission (FCC) refers to the scam as an Internet Protocol (IP) Relay Fraud. It involves an online message relay system in which a communication assistant serves as a go-between for a person with a hearing or speech impairment and someone with whom that person is trying to connect via phone.

The crook poses as a hearing/speech-impaired individual and uses the web-based platform to type messages. The relay operator reads the text of those messages, places the call, and verbalizes the text to the call recipient. The communication assistant also then relates responses from the call recipient – and so on through the conversation.

While IP Relay systems were created for noble reasons in the early 2000s and are valuable to those with a legitimate need for the service, crooks have been using them to try place fraudulent orders with businesses across a variety of industries for approximately 20 years.  

Typically, the con artists use stolen or fake credit cards and ask for the merchandise to be delivered out-of-state or internationally, often requesting that their own preferred shipping service be used. They may also tell a victim business to use money from the total payment to cover shipping and handling.

If the goods are shipped, the businesses are out the merchandise and never get paid.

Requests for Hoodies, Speakers & Flash Drives

Van Buren told ASI Media that in scam calls he received, the crooks wanted products including flash drives, Wi-Fi speakers, watches and hoodies. Blank goods and overnight shipping were also among the requests.

“One wanted product sent to Doral, FL, which is known for freight forwarders that ship out of the country,” said Van Buren.

Van Buren said that when he declined to do business with a scammer, they became accusatory, saying he was discriminating against them because of their alleged impairment. “They try to guilt you,” he added.

Crooks have been abusing IP Relay since at least as early as 2004. To help combat fraud, federal law now requires IP Relay users to register with an IP Relay provider to receive a 10-digit geographic number from which they can make or receive calls, the FCC says. Still, if Van Buren’s experience is telling, crooks appear to be finding work-arounds.

“The FCC is working with consumer groups and relay service providers to prevent misuse of the service and issues public notices to warn businesses of the potential for fraudulent business transactions being perpetrated through IP relay,” the FCC says on its website. “We also work with the Department of Justice, the FBI and the FTC to prevent fraudulent business transactions by phone or over the internet.”

Tips To Keep From Getting Cheated

The FCC said there are some telltale signs for spotting fraudulent telephone orders. They include that the person wishing to place the order:

• Is happy to order “whatever you have in stock”
• Supplies multiple credit cards as one or more are declined
• Cannot provide the credit card verification code number
• Wants the goods shipped through a third party and/or to an overseas location
• Will not identify themself or give a company name
• Changes delivery or payment method after the order has been approved.

From a promo-specific perspective, an order for a larger quantity of blank goods can be a warning that a scam is afoot.

The Consumer Protection Unit of the Alaska Department of Law has additionally advised businesses to protect themselves when in doubt by:

• Asking for the customer's full name, telephone number and address
• Collecting complete information on the credit card:

– Credit card type
– Issuing bank and bank's customer service number
– Card holder's full name, telephone number and address
– 16-digit credit account number
– Card verification code
– Expiration date

• Verifying the information given on the credit card by checking with the issuing bank
• Calling the customer back using the number associated with the credit card holder's account, not another phone number
• Using your own shipping company, especially for deliveries overseas.

While being cautious is important, the FCC has said that businesses can’t just assume an IP Relay call is a fraud. “We remind merchants that if they do business by phone with the public, the Americans with Disabilities Act requires them to accept calls, receive orders and do business by phone with persons who are deaf or hard of hearing or who have a speech disability and use…IP Relay service,” the FCC states.

Scams in Promo Proliferating?

Scams aimed at the promo products industry are nothing new, but there are industry executives who believe the con attempts have become more pervasive of late.

One now-common fraud involves schemers who front as actual buyers for a real company/organization in an effort to get a promo firm to provide large quantities of logoed or unbranded products for which the crooks will never pay. They then sell the goods on the black market. The contact attempts typically come through email or a distributor’s website form. Some industry executives say that the rash of scam attempts following that pattern indicate that a well-organized racket is aggressively targeting the promo market.

“I don’t want others to go through what we did.” A #promoproducts distributor that was recently the victim of a scam -- to the tune of more than $60K -- shares lessons learned. https://t.co/coVmrf2e9g @asicentral @ASI_MBell

— Chris Ruvo (@ChrisR_ASI) September 28, 2022

Sadly, some distributors have been duped by the impostor cons. In certain cases, they’ve sustained losses in the five-figure range to over $100,000 as a result of fulfilling the bogus orders. Drinkware and tech items, including speakers, have been among the more common product requests, often with quantities in the range of 10,000 or so.