Getting out of harm’s way

Craigslist scam to misrepresent B2B’s identity offers a lesson in risk management

We often read and hear about stories of fraudulent scams and believe they won’t happen to us, or to our own businesses. The incidents are too isolated, the odds of an occurrence are too miniscule, or we feel we’ve effectively managed our risk to ensure that if a scammer attempts to victimize us, we’re sufficiently protected.

I mention this because New North B2B itself recently was targeted by an out-of-the-country scam artist using our company’s name and likeness to perpetrate a check kiting scheme using the popular online bulletin board Craigslist. For our part, we’ve been working diligently on damage control to mitigate the risk to our business as well as to preserve our reputation. Unfortunately, it’s an expense of time, energy and money that might otherwise go toward improving our reader experience – or at the very least, having a less stressed publisher.

The incidents began in early August when a job seeker near Sacramento called our office asking about a job posting on Craigslist. The description for the scam “employer” borrowed copy directly from the home page of B2B’s web site, but simply removed “northeast Wisconsin” from the text. It used our physical address and our actual Web site address as well.

The difference: when misled job seekers clicked the “respond” button on Craigslist to send in their resume and application, an email was sent to “info@northb2b.com,” a minor variation from our newnorthb2b.com.

A reply from the con artist asks victims to sign a contract indicating they will cash checks mailed to their residence, then wire 95 percent of the value of the check elsewhere. The victims are allowed to keep 5 percent for their compensation.

Fortunately for B2B, a savvy job seeker in Sacramento thought the offer sounded too good to be true, called our office and spoke to me, alerting us to the rouse.

We looked up the posting ourselves, contacted Craigslist, and informed them of the scam. Case closed, or so we thought.

Three weeks later, we receive a similar phone call from a job seeker in the San Francisco area. On this occasion, by the time we heard about the abuse of B2B’s reputation, the scammer had already taken down the posting on Craigslist. The same thing happened a week later in the Los Angeles market. Then another week went past and the scam appeared to spread to New York City. Each time, we were fortunate to receive a phone call from a would-be victim checking on the legitimacy of the offer who alerted us to the scam.

As violated as we felt, I learned B2B wasn’t alone after contacting our friends at the Wisconsin chapter of Better Business Bureau. It’s apparently the latest trend in running scams, according to Lisa Schiller, trade practice investigator with the BBB.

“This type of thing is taking up more and more and more of my time, i.e., investigating fraudulent companies – what I like to term “hijacking” – legitimate businesses,” Schiller wrote in an email. “My guess is that the perpetrators are located outside the U.S.”

In fact, that was exactly the case. I looked up the domain name registration for “northb2b.com” and found it assigned to Konstantin Muchnik in Moscow, far away from the reach of the U.S. legal system or even apparently from Craigslist fraud enforcement personnel, who appear to have the teeth of a shopping mall security officer.

While we haven’t been getting too far in our efforts with Craigslist officials to avert this fraud, Schiller said other companies who’ve experienced much of the same abuse of their identity and reputation have attempted proactive measures to protect themselves and the public who might otherwise fall prey to such scams.

Some victims of this “identity hijacking” have included a message on their web site’s home page expressing awareness of the scam and clearly stating they have no association with it whatsoever.

It was even suggested to me that B2B place a similar message on our own Better Business Bureau report page, telling consumers  visiting that page to investigate B2B that we’re aware our company’s identity is being misrepresented by another and that it’s likely a scam they should avoid. Coincidentally, the BBB provided me with a report of our inquiries during the past year - while we typically averaged about five or six inquiries a month historically, the number of inquiries on B2B spiked to more than 50 during August and had already topped 30 by the third week of September, a signal that reponsible people are taking the time to investigate responsible businesses.

Now if I could only seem to find the BBB report page for Konstantin Muchnik...