THE INVESTIGATORS: Experts warn of solicitations targeting small business owners
BATON ROUGE, La. (WAFB) - Experts are warning small business owners as solicitations target capital area businesses.
One small business owner who spoke with the 9News Investigators says she fell for the solicitation and now wants her money back.
“It’s overwhelming and very concerning because of the fact that I have children and I don’t have money just to be wasting,” she said.
The business owner did not want to be identified but she did want to get the message out. She says the moment she filed paperwork with the state to open her business back in August, she got several notices from three different companies. Those companies include the Division of Corporate Services, LA Certificate Service and Labor Poster Compliance. All of them asked the business owner to send them money to get official certificates for her business.
WAFB’s Scottie Hunter asked the business owner how much money she lost to the solicitation.
“It was a little over $250,” she said.
The documents look pretty official. One of them even outlines a fine the business could face if they do not have the documents displayed in their business. After she paid her money and go the certificates in the mail, the business owner says that is when she asked for her money back from one of the companies.
“She told me to send them back in the mail and they would send me my money back,” she said.
After following those directions, the business owner says her refund from LA Certificate Service never came. Because each company did send her the certificates, Carmen Million with the Better Business Bureau says they are not doing anything illegal but it does raise a red flag.
“The company is providing a product but it’s misleading,” said Million.
Million says this is not a scam but she does say it is not something that’s necessary for business owners to do. When a business files with the state they can get the documents for free or for a small fee. Million believes paying anything more than that is ridiculous.
‘Yeah and if a business went to the Secretary of State and they did get a copy, it’s very minimal. I think when you renew it every year it’s like 5 dollars so to get a copy is nothing,” said Million.
Million is warning businesses to investigate before they send any money.
“We don’t consider this necessarily a scam but it is very misleading,” said Million. “If you look at the solicitations, they look like legal documents, like they’re from a government agency.”
WAFB tried to track down the companies at the addresses listed on the notices but each address turned out to be for a P.O. box at a different shipping store across the city. Million considers that another red flag. When business owners pay their money and ship it off, she says the address may be local but they really have no idea where the money is going. One of the companies, LA Certificate Service, has an “F” rating with the Better Business Bureau for a mountain of complaints that have poured in. Million says all of those complaints have gone unanswered by the company.
“While we can take a complaint, it doesn’t mean that they’re going to get their money back but we will try,” said Million.
WAFB reached out to the companies through email and the Division of Corporate Services, or D.O.C.S, responded saying “we are nothing more than an independent third-party service provider who, for a reasonable fee, obtain a certified copy of business documents for newly formed companies”. A representative with D.O.C.S told WAFB they use P.O. boxes for tracking purposes and when asked about the fees, they said the money covers their time for processing the request, ordering copies and sending them out to the businesses that hire them.
Million says no one thinks they are hiring a private company. She believes business owners are handing over the cash because they see an official-looking document and send their money thinking it’s required by the state to start their business.
“Unfortunately, they’re selling a product that you can get for free and they’re not being upfront but if they’re sending you a product that you paid for, it’s your responsibility to investigate and determine this before you purchase something,” Million added.
The business owner who spoke with WAFB was able to get her money back from D.O.C.S. and says she will continue to try to get it back from the other two companies. WAFB did find that this is not just happening in Louisiana. Similar situations have been reported from other states, including South Carolina, Michigan, Florida, and others. The Louisiana Secretary of State, Kyle Ardoin, released the following statement to WAFB on the matter.
“Our Commercial Division regularly communicates topics such as these marketing scams with registered Louisiana businesses by posting warnings on our geauxBIZ.com site, our sos.la.gov site as well as across all social media platforms. We also send important messages to our partners and constituents via subscriber communications. These are emails or texts to those individuals who have signed up to receive such messages through their geauxBIZ accounts.”
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