© 2006 Door & Access Systems
Publish Date: Fall 2006
Author: Carla Rautenberg
Pages 43-44

Scam Hits Door Dealers
At Least 16 Dealers Targeted

By Carla Rautenberg, Special DAS Correspondent

“I’m angry!”

So says Phil Schrock of C.H.I. Overhead Doors. “Door people have enough of a hard time making it without this.”

This summer, crafty criminals scammed more than a dozen door dealers nationwide with phony door orders, raking in thousands of dollars. Will you be next?

To prepare this story, DAS spoke with 16 dealers who were hit by the scammers, sometimes repeatedly. One dealer is out more than $2,000. Others got stuck with doors they ordered before realizing that the customer was bogus.

The first reports of this scam reached Phil Schrock in late May 2006. By mid-June, when four of their dealers had been hit, C.H.I. sent a fax to all of their dealers, alerting them to the scam. Several dealers said that fax helped them spot fraudulent orders quickly. However, the scam continues.

How It Happens

The fraud uses communications technology, stolen credit cards, and wired money transfers. The scammer appeals to your sympathy and natural desire to help others, especially the disabled and those in need of charity.

In each case, the initial contact is a telephone call in which the caller keys his/her remarks into a computer. The comments are then spoken to you by a live communications assistant (CA) who explains that the caller is either deaf or unable to speak. The CA then conveys the caller’s message verbatim.

These “relay” calls are typically time-consuming and laborious. Many dealers reported that these calls, which should have taken 10 minutes, took up to an hour.

The scammer usually asks to continue communications with the dealer directly via e-mail or fax. In most cases, future exchanges discuss door requirements, prices, and credit card numbers.

Then Comes the Sting

When the dealer runs the credit card numbers, they usually go through just fine, despite the fact that these are stolen cards. When there is a problem with authorization, the scammer provides the number and security code of another (stolen) card.

The scammer eventually requests that the doors be shipped to a church or charity out of state, most often to Hawaii or Alaska, but in at least one case, to Ghana. However, the shipping company that the scammer has chosen does not accept credit card payment.

Here comes the sting. The scammer asks the dealer to charge an additional amount (often $700) to a credit card, and then wire that same amount in cash, via Western Union, to the alleged shipping company. This is where the thieves make their money. The garage door order is simply a ruse.

Dealers Catch On

“It just seemed fishy from the start,” says Bobby Holmgren of Tri-State Garage Door in Sioux Falls, S.D. But when the credit cards are quickly authorized, these transactions gain an air of legitimacy.

“It was all approved by the credit card companies,” points out Patrick Smiley of Tri-County Door in Acme, Pa. “We thought everything was legit … it looked very, very real.”

Fortunately, many dealers smell a rat when the scammer requests that the doors be shipped out of state.

Dan Grandfield of Chattanooga Door exclaims, “I said, ‘This does not make a bit of sense. Why wouldn’t you contact someone in Hawaii? Why would you send a door from here?’ And so they gave up. They just quit calling and went on to somebody else.”

Other dealers saw a red flag when they were requested to wire cash, often to an address in Africa. At that point, most simply terminated contact with the scammer. One unfortunate dealer, however, did as he was asked, and wired cash to the alleged shipping company. This emboldened the scammer to order more doors and request more cash for shipping.

“There was never any mention of shipping on the relay (call). That all came through the e-mail. So maybe that’s a sign to watch for,” suggests Noah Hulett of Danville Overhead Door in Danville, Ky.

“Who Ya Gonna Call?”

Several dealers who caught on to the scam before losing any money let the matter end there. Others, however, filed reports with local police and/or contacted banks to report the scammer’s credit card numbers.

In the case of one dealer who was stung, when the scammer placed additional orders, the communications assistant (CA) contacted the dealer directly and told him he was being defrauded. This was helpful but risky, because CAs can be fired for intervening like this.

The dealer who lost $2,000 reported the crime to the state police. These special calls, however, are virtually impossible to trace. None of the dealers who filed police reports has heard anything further.

Do the Authorities Care?

“I called the credit card company, and they didn’t even bother calling me back,” says Aaron Poling of A.S.A.P. Garage Door Repair in Huntley, Ill. “Then I tracked down the bank that the credit card belonged to, and they wouldn’t tell me anything, except none of the information matched.”

David Anderson of Anderson Doors in Seattle, Wash., was hit by the scam in early June. When he was asked to wire cash, Anderson called the bank to report the credit card numbers and learned the cards had already been flagged for fraud.

“If you run the credit cards, they’re good. It’s probably about 30 days before you’re going to find out they’re bad,” he notes. He filed a police report, but “they just put it on the back shelf.”

Unsure of where to turn for help in stopping this fraudulent activity, Anderson then contacted DAS editor Tom Wadsworth, who had also heard about the scam from Phil Schrock of C.H.I. After obtaining copies of e-mails between door dealers and scammers, Wadsworth filed a formal report with the Federal Trade Commission (FTC) on June 29. To date, the FTC has not responded.

Thousands of Victims

It appears that the scammers have only recently homed in on the garage door industry as a potentially lucrative target. With minor variations, similar schemes have dogged thousands of businesses across the country since 2002. Anyone selling merchandise over the phone or on the Internet is a potential mark.

Also victimized by these scam calls are legitimate users of CAs, such as the speech/hearing impaired. Scam calls keep CAs busy so that deaf callers have to wait. Some in the deaf community fear that abuse of the technology endangers the future of these services.

We all pay to support these special telephone services through taxes on our phone bills. Scammers abuse these free services, intended for the disabled, to run their thieving schemes.

The FCC Responds?

On May 3, 2006, the FCC opened a proceeding requesting comments on ways to curtail the abuse of Internet-based forms of these telecommunications services. We contacted the FCC to ask about the status of the proceeding.

A senior spokesman for the FCC, who insisted on anonymity, said, “It could be a matter of months or even years before a final order is issued.”

Sidebar:

Red Flags
(Note: Each of these activities is legal. But if used together, you may be dealing with a scammer.)

1. Odd Phone Call. You get a time-consuming phone call from a communications assistant (CA).

2. Doors for Charity. The caller wants to purchase one or more garage doors for a church or a charity.

3. Shift to E-mail. The caller suggests that further communications be conducted via e-mail or fax.

4. Sloppy Writing. Written messages contain misspellings and poor grammar.

5. Wire Me Money. The customer asks you to wire money.

To file a complaint, try the Internet Crime Complaint Center at www.ic3.gov.