Business & Real Estate

BBB reports show more than $2M in losses from IT company scam

If your business is looking for IT support, be sure to do your homework before handing over any money. Since March, the Better Business Bureau’s Scam Tracker has received more than 50 reports about a China-based firm that has tricked dozens of people out of anywhere from $3,000 to $30,000.

How the scam works

You are looking to hire a company to help develop software, set up a call center, build a website or perform other technology work. You see an ad online for an IT company with a strong track record and competitive prices.

At first, the firm appears to be everything it claims. You may even have a phone conversation with the CEO, who assures you that a team of professionals will work on your project. But once the “IT contractor” receives the upfront payment, everything changes.

The companies that reported to Scam Tracker said they got counterfeit products or simply never received their orders. People who paid for a website or software development told the Better Business Bureau that the contractor stopped responding to email or phone calls after getting payment. In other cases, consumers report receiving low-quality work and being charged two or three times more than the agreed-on price.

The current complaint spike involves a company using the names ITR, ITResources or Scott Freeman. Expect those aliases to change as savvy consumers catch on.

Avoiding the scam

When hiring a contractor – whether for a home construction project or an IT business solution – similar prevention tips apply.

• Ask for references. Ask the contractor for a list of recent references you may contact. Ask the references about the services performed and their overall experience with the contractor and the quality of the work.

• Don’t be tempted by low prices. Overseas firms may advertise low prices, but hiring a local company with a strong track record may save you money – and headaches – in the long run.

• Arrange a payment schedule. Never pay in full upfront. Stagger payments so that your final payment is not due until the work is complete and you have fully reviewed it.

• Get multiple estimates and a written contract. Get all estimates in writing, and never let work begin without a written, signed contract. Do not be pressured into signing an agreement before you are ready, and make sure you read and understand everything.

For more information, visit BBB.org/ScamTracker.

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