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AG Kilmartin Warns Local Businesses of Cross-Country Phony Billing Scheme

With a spike in complaints to the Rhode Island Attorney General's Office, Attorney General Peter F. Kilmartin has issued a warning about a new phony billing scheme.

In this scam that targets businesses, nonprofits and municipal agencies, phony invoices from a company called "UST Development, Inc." – which also purports to do business as UST and US Telecom – located in La Verne, California, are sent for a "telecom maintenance agreement." However, the recipients of the invoices have never solicited or purchased telecom maintenance services. The fictitious invoice shows a charge of $425, which "covers preventative maintenance on all telecom system equipment, including telephone instruments, switches, routers and cabling" and thanks the "customer" for their business.

"These invoices are phony, but the scam is very real and defrauds businesses out of their hard-earned money," said Attorney General Kilmartin. "The perpetrators know that if they send enough phony invoices, some of the businesses will just pay the bill without questioning it. The best defense is to carefully read all invoices, and if you think you have been charged for goods or services you did not purchase, don't hesitate to speak up."

Complaints about this scam have been reported nationwide, and in some states fraudulent invoices have been sent to government agencies.

To avoid being scammed by phony invoices, Attorney General Kilmartin offers the following tips to businesses: • Review all invoices carefully. Check invoices against purchase orders and against goods and services received. • Verify each invoice with the employee who authorized the purchase to make sure that all details are accurate. • Know the vendors that you do business with – ensure that they are reputable and in good standing. If you're not familiar with a business, ask for references. • If you are unsure whether your business owes payment for particular services or products, call the phone number listed on the invoice to inquire. Legitimate businesses have genuine contact information on invoices and welcome questions.

If you believe you are a victim of consumer fraud, please contact the Consumer Protection Unit at the Department of Rhode Island Attorney General at (401) 274-4400. You can download a consumer complaint by visiting our website at www.riag.ri.gov. You can also email us at contactus@riag.ri.gov.

About the Office of the Attorney General Consumer Protection Unit The Office of the Attorney General Consumer Protection Unit investigates and mediates consumer complaints concerning unfair and unlawful business practices and misleading advertising arising out of alleged violations of the Deceptive Trade Practices Act. If groups of people are victimized by a deceptive trade practice, this office may file in the Superior Court a civil investigative demand, which is a formal investigation. In appropriate cases, a lawsuit to stop the illegal business practice may be initiated.

Apart from carrying out its statutory responsibilities, the Unit also provides information and referral services to the general public. Consumers are directed to the appropriate governmental or private agencies for help in answering specialized questions or resolving disputes that are not within the Unit's jurisdiction.

The Consumer Protection Unit is available to speak to community groups on how to prevent being a victim of identity theft and other scams. If you believe you are a victim of consumer fraud, please contact the Consumer Protection Unit by calling 401-274-4400 or email at contactus@riag.ri.gov.

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