Currently Running – Corporate Scam

Written by: Andrew Gale - Orange County - Small Business Attorney

Current Scam, California Incorporation Services – 175

 

Department Of California Collectors – Disclosure Statement – Remit Payment $175

This is a fairly simple scam associated with California Incorporation Filing Processes. Apparently coming from the Department Of California Collectors, a request is received by a business for an excessive payment of $175 (or a similar amount) for filing a disclosure statement.

Scam — Incorporation Disclosure Statement 175 – Corporate Attorneys California
 

At the time of writing this article, the letters appear to be being sent all over Orange County California. See this example of what you might receive, this one is allegedly from the Department Of California Collectors (DCC).

Due to government filings that are required in order to incorporate your business as a California Corporation, the address of your corporation and the names of your officers and directors of the corporation become a matter of public record.  These specific details are therefore easy to obtain by the scammer.  This enables them to have specific names and addresses on the form making the form look all the more legitimate.

The forms appear to come from a variety of official-looking government offices and supposedly require the immediate attention of a specific corporate officer or director.

These scams are straightforward enough in that they are simply overcharging for filing various California articles of incorporation.  The overcharge is usually in the region of a few hundred dollars, but not so much as to arouse suspicion.

These corporate records or incorporation-related forms should only cost a very small amount if they are filed directly with the appropriate government agency.

The scammers or crooks rely on sending out quantities of these forms and having a percentage returned with the higher payment.  These solicitations can also be misleading in that they often suggest that the corporate records for the corporation have been completed for the year.  This is often not the case and causes the company to get into trouble further down the road as a result of incorrect or insufficient filings.

Always have a qualified California Corporate Attorney take care of your Corporations filings, you will save money and time in the long run and can relax knowing your business is sound and in good standing with regard to its government obligations and filings.

Changes in California Law – Misleading Solicitations

As a footnote to this, it’s clear that The State of California has become aware of the prevalence of these types of misleading solicitations and in an attempt to stop this activity, passed a new law in January 2012 targeting this type of scam.

The law supported by the California Secretary of State, Debra Bowen, requires disclaimers to be added to third-party mailings. The part of this new law that is significant requires the following disclaimer to be added to the front and back of every page in upper case, 12 points, bold type font:

‘THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY GOVERNMENT AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT’

In addition, the law also forbids the soliciting companies from using a name that may make the recipient believe it is from a government agency such as the ‘Secretary of State’s Business Division’.  This law also increases the penalty to $2,500 for a violation of this law.

Recipients of these types of solicitations are encouraged to file a written complaint with the California Attorney General’s Office.  Should you decide to make a complaint of this nature it’s vital that you include a copy of the solicitation documents in their entirety, including the envelope and any other related documents.

A complaint can be completed online at the California Attorney General’s website. URL?

It remains to be seen how effective this new law will be at stemming the incidence of scammers targeting unwitting corporate officers to overpay for incorporation and corporate records services.

If you receive a letter that appears to be from a government agency but are unsure of its validity call Incorporation Attorneys and start a free trial of our California Corporate Records Services.

Simply call +1 (714) 634-4838 or complete a simple corporate records contact request form and we will contact you.


Andrew Gale – Incorporation Attorney

Attorney at Law Offices 1820 West Orangewood Avenue, Suite 104a, Orange, CA 92868 Office: +1 (714) 634-4838. I provide legal advice, counseling and related services to entrepreneurs including the formation and management of their corporations and estate plans.

My Law Office is based in Orange County California and I have practiced law for 30 years. I have given advice to more than 1000 small business owners on the best ways to set up a company, what types of business entities (corporations, limited liability companies, partnerships) are best suited for them and their small business, how to legally run the business to protect their assets and how to successfully transfer the business to family or key employees through the proper use of estate planning and trusts.