by Patrick Bradley: The tricksters are back at it, mailing out a fake annual report notice to unsuspecting churches. Here’s what they’re up to, how to spot it, and what to do.
Depending on your state (see my growing reference list), your church corporation has to file some kind of annual renewal. It lets the state know that you’re still active and gives you a chance to update them on mailing address, current officers and stuff like that.
It’s a pretty simple process:
You get a legitimate reminder from your state to file your annual report
You go to the Secretary of State’s website (or Corporation Commission in a few states)
You follow the link to file your annual report
It typically takes you less than 10 minutes and will usually cost $30 or less
There may be a few states that have a snail mail paper form still, but the process is basically the same.
What The Tricksters Are Doing
Some unscrupulous business gets a list of corporations off the state’s website (they’re public records). Then they mail you a fake annual report notice that offers to keep you compliant and avoid steep penalties. They use fear and intimidation to scare you into sending them payment.
But here’s the tricky part: what they’re doing isn’t technically illegal. The fines they threaten you with are the real fines the state will charge if you don’t file your own annual report. And if you go 2 cycles in a row without filing, most states will administratively dissolve your corporation. The tricksters threaten you with legitimate information (that shouldn’t be very threatening in reality).
And when you send them your money and basic information, like addresses and officers, they really will file your annual report for you. But they’ll charge you hundreds of dollars to do what you can do for yourself for less than $30. In less than 10 minutes. Which is probably less than you’d spend sending your info to the tricksters.
They count on your forgetting exactly what you’re supposed to do and when. I mean, it only comes up once a year, right? In a very few states it’s every 2 or even 5 years.
What to Look For
Here are the giveaways of a fake annual report notice. It will:
come in a very official-looking envelope, often stamped with a warning/threat on the outside
be on very official-looking letterhead
have a seal (logo) that is reminiscent of your state’s official seal
use an official-sounding name like “Corporation Compliance Service Division”
But the dead giveaway is that they have to include a disclaimer somewhere in the fine print that they’re not the government or affiliated with any government agency. Because if they don’t, they’re flirting with committing mail fraud, a serious federal offense.
It’s a big enough problem that some states are posting public notices about it (read California’s here).
What to Do About a Fake Annual Report Notice
The best thing you can do to avoid getting tricked by a fake annual report notice is to take 10 minutes to figure out what your state’s requirement is, and when yours specifcally is due. Then set a recurring calendar reminder several weeks before it’s due. You can even include a hyperlink to the state’s filing page in your calendar event so you can just click through and file it.
As for the fake notice: shred it. And maybe do a little happy dance. They haven’t duped you!
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