I just received a fee request from the Department of California Collectors for $175. Having just created a corporation, it appeared to be one of the numerous fees I get charged by the government.In actuality, its a scam. I know the people that run this scam think they're technically legal since they subtlety hide some statement that says this "fee" is "not a bill" and I have no obligation to make any payments. However they deliberately make this form very similar to the corporation information disclosure forms we have here in California.
When I first put up this post my hope was that this was an experimental scam where the scammer was just seeing if he/she could make money. Over the last month, however, it appears they have sent out several direct mailers which suggest they're making pretty good money. I've had over 700 people read this post and it appears to spike every Wednesday/Thursday. That suggests a well thought out direct mail campaign, and one that has probably been running for a while.
I believe it was Brendon that suggested filing a complaint with the California Attorney General. Please do.
If any of you work at a bank (or know someone at a bank), it might be worthwhile to look up this company to see if you're doing business with them. Most bank's I've worked with don't want to be associated with a business like this.
I personally think the Better Business Bureau is not much better then these scammers, but if it helps educate someone before they send in their $175 it's worth doing. (Just don't give any money to the BBB, I believe they are about as unethical as a legal business can be).
Its been about 15 years since I ran a direct mail campaign, but I believe my cost per address was about $.40 inluding printing, postage, etc. So a run of 5000 cost me $2000. Assuming a response rate of 1% (and the way this scam is run, I suspect the response is better then that) that means each $2000 run of their campaign is generating $8,750 in revenue.
My 700 visits/month suggest they may be doing this weekly. These numbers are guesses, but if you're wondering why people would do this I think the profit motive is explanation enough.
Zina just left a comment pointing out that these guys appear to have been caught. While I want to believe this is true, we're still getting reports that these mailers are being sent out. Either these were "in the mail" as our justice system worked or there are copycats out there.
$1.75 million in restitution is a pretty large chunk of change. These guys were printing money.