Scam Targets Connecticut Businesses As They Prepare to Pay Annual State Fee

Attorney General William Tong, Secretary of State Denise Merrill and Department of Consumer Protection Commissioner Michelle H. Seagull are cautioning businesses to avoid paying unnecessary fees to entities offering assistance with annual report business filings.

State agencies have received more than 100 complaints in the past week alone regarding what is described as “official-looking mailers” from companies seeking additional fees to file annual reports for Connecticut businesses. Officials stress that these extra fees are not necessary and can be avoided by filing directly with the Secretary of the State’s Office. The filing period begins on January 1.

The origin of the mailings, which appear to have blanketed the state, are so far unknown.  The Office of the Attorney General is working to determine whether the mailers originate from the same company that previously reached a settlement with the State to resolve allegations of government imposter fraud.

“We are in the midst of an economic crisis, and businesses cannot afford to pay for services they don’t need. Be sure to look at the fine print and make sure you are dealing directly with legitimate state agencies to file only what is required,” said Attorney General Tong.

“Connecticut has made it easy for small business owners to file their annual reports online,” said Secretary Merrill. “Small business owners should be on the alert for government imposter scams like these and protect themselves by only using the official websites to file their reports.”  Earlier this year the state Department of Revenue Services operationalized a new web-based system for filing state taxes.  That system is separate from the Secretary of the State’s annual fee for business entities. 

“We know business owners have a lot on their plate this year, but it’s important to remain vigilant and beware of scammers that might be impersonating a government agency or offering assistance filing reports and documents for a fee,” said DCP Commissioner Michelle H. Seagull. “These sophisticated schemes might look like official government documents or agencies, but are really attempts to scam businesses out of money.”

Businesses receiving the documents have indicated that it takes a careful reading to determine that it is not an official document from a state agency, and can be ignored. 

Government Imposter scams can take many forms and can target individuals and businesses alike, officials point out. In one of the more common schemes, scammers mail a solicitation or send an email to businesses to “advise” them that they must purchase certain products or forms, or file particular reports in order to be in compliance with the law.

The scammers then offer to assist businesses with satisfying these requirements in exchange for a fee. Scammers are careful to design their mailings to resemble official government documents by incorporating elements such as seals, bar codes, and references to statutes and regulations. The mailings may include terms such as “IMPORTANT,” “OPEN IMMEDIATELY,” or “TIME SENSITIVE” to create a false sense of urgency, state officials explained.

Businesses could end up paying significant fees for services they do not need. These types of scams can pose another risk. Some scammers also ask business owners to authorize the scammers to act on their behalf with government agencies. With the authorization in hand, scammers have been known to submit filings to create the appearance that they own or control the business, to open bank accounts in the business’s name but under the scammers’ control, or to borrow money purportedly on the business’ behalf.

Earlier this year, the Department of Consumer Protection issued another scam alert, urging businesses to be wary of emails informing them they’ve won an award from a company they haven’t heard of, and that doesn’t come with any recognition beyond a display item that they need to pay for.

In some professions, it can be common for you to pay for a plaque for an award you apply for (if you win), or for some publications to offer you a framed article for a cost, the Department noted. However, it’s uncommon, and suspect, to get an offer out of nowhere for an award you have to pay for, without an invitation to an event or ceremony, and without any recognition of other winners.  Additional red flags that an award may not be legitimate are: you don’t see your name on a list of award recipients online, and there’s no press announcement, according to DCP.

“Too many entities try to take advantage of small businesses by selling them products they don’t really need,” said Commissioner Seagull. “Offers to purchase awards absent of any other recognition is something that businesses should be suspicious of. We want to do everything we can to make sure businesses in our state have the resources to thrive and encourage anyone who receives suspicious communication to contact our office.”