Scam Alert: Bogus Billing on the Rise

The invoices that arrived in the mail looked real, informing recipients that their subscriptions to Sports Illustrated and Sporting News would expire unless renewed immediately. So the subscribers paid, but their magazines never came—even though their checks had been cashed.  

The U.S. Postal Inspection Service says hundreds of thousands of Americans have received phony renewal bills for many different magazines from rogue companies that use names like Magazine Renewal Center, Magazine Billing Center and Publishing Process.

Fake invoice scams have been around for decades, hitting mostly businesses, especially small firms. Official-looking bills are sent for supplies never ordered and services never rendered. Each bill may be for a relatively small sum, but collectively, it’s estimated that invoice scammers collect billions of dollars a year.

In recent years, individuals increasingly have been the targets of invoice fraud, particularly by bogus magazine billing companies. The fake outfits buy subscription lists from publishers, falsely claiming that they want to sell other goods or services to subscribers. Instead, they send phony bills to the names on the list. In one case now being pursued by the U.S. Postal Inspection Service in Washington state, Daniel W. Base sent invoices with a magazine’s real logo but fake account numbers to subscribers, urging immediate renewal before a sharp rate hike. One tip-off that the bill was fake: The e-mail address wasn’t the magazine’s but an AOL account. Base’s victims lost an estimated $3 million in the late 1990s from a similar scam, although he made his sales pitch by phone.   

Scammers bank on people doing sloppy bookkeeping.  So be alert to bills from unusual or unknown companies. Before paying any invoice, make sure you actually ordered—and received—the magazines, goods or services. If you doubt a bill’s validity, call the company to make sure the bill or collector is legitimate.

You can also check out a company with the Better Business Bureau or your state’s consumer protection agency. Report phony bills to the hotline in the Postal Service’s Office of Inspector General and/or the Federal Trade Commission.