FTC Workshop Educates Public on Risk of Office Supply Fraud

Participants at the Federal Trade Commission's workshop on office supply fraud identified employee education and training as a top priority for combating the estimated $200 million a year problem often referred to as "toner-phoner" fraud.

Audience members at the FTC workshop held on November 8, 2001, listed several key steps to avoid such fraud, which typically involves the sale of office and cleaning supply products at greatly inflated prices. Specifically, these recommendations included: 1) train employees about the vendors from which they can and should buy supplies, the specific supplies they are permitted to buy, and what the prevailing prices are for such goods in the local area; 2) have an approved supplier list and/or the specific name of a supplier contact that can be called when making purchases; 3) designate employees who can make purchases or specify that only purchasing/procurement staff are authorized to buy such supplies; and 4) train new employees on company practices regarding supply purchases and repeat this training often to keep current with staff in the organization.

Audience members -- ranging from large imaging companies to small business victims of the office supply scams -- were encouraged to develop channels to publicize the problems of office supply fraud and provide to consumers tips to avoid it. Associations and nonprofit organizations were encouraged to develop and implement classes for procurement officials with direct responsibility for purchasing office supplies.

According to the FTC's Bureau of Consumer Protection Director Howard Beales, today's workshop "served as a brainstorming session to discuss what more can be done to stop this type of fraud -- through law enforcement, consumer education, and industry self-help." He said that FTC data through the first half of 2001 indicate that the practice remains significant, with little drop-off from last year's statistics. Currently, the FTC is on pace to receive about 3,500 complaints about office supply fraud. More than 13,000 complaints related to office supply fraud have been registered since 1997.

Most of the U.S. toner-phoner complaints this year came from California (378), New York (221), and Texas (197), Beales said, with a large number also coming from the Canadian provinces of Ontario (447) and British Columbia (200). Approximately 80 percent of all complaints originate from telemarketing calls.

The FTC encourages professionals at all small businesses, nonprofit organizations and large corporations to contact the Commission's Consumer Response Center at the number below for more information on how to recognize and avoid office supply fraud. It is preventable, and the FTC is committed to ensuring that all interested businesses have the information they need to avoid becoming victims of such deception.

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.