How to Spot a Misleading Solicitation
Q: I got some mail about my LLC, but I have no idea what it is. Should I pay it?
Thank you to a client from New Jersey for that great question! As a business owner, you may get mail that looks like it came from a government agency but is actually a deceptive solicitation from a private company trying to get you to pay for their services.
For example, you may get a letter from an unfamiliar organization telling you to send their company money (above the actual state fee) to file your annual report for you. These solicitations sometimes offer other business services, like employment posters or a Certificate of Good Standing, which may or may not be an actual requirement for your business. While these companies might actually provide the services they offer, they typically charge an exorbitant fee, which they try to trick you into paying by making you think the letter is coming from a government agency. We’ll explain how to tell a solicitation scam from an authentic government notice.
How to tell if a letter is a misleading solicitation
A solicitation letter will often look misleadingly similar to a notice from a government agency. It may have an official-looking state letterhead at the top, from a company with a vaguely official-sounding name, like “STATE NAME Compliance Services.” The solicitation letter might also include specific details about your business, like your state business ID number and the names of your officers/directors.
However, there are a couple ways to tell that the letter is a solicitation:
1. Look for a disclaimer in the fine print
These types of companies are required by law to include a disclaimer (usually in the fine print) stating that they are NOT actually connected to a government agency. These disclaimers vary from state to state, but they will typically sound something like this:
“This company is not affiliated with any government or state agency and this notice is a solicitation to your business.”
“You are NOT required to purchase anything from this company, and the company is NOT affiliated, endorsed, or approved by any governmental entity.”
If you find a disclaimer similar to this, you know that the letter is not from the government and can be ignored.
2. Contact the government agency directly
If you’re still not sure whether the letter is a solicitation or an authentic government notice, the safest course of action is to directly call the government agency that formed your business. Do NOT call the phone number on the letter itself, as that might just connect you to the company that is trying to mislead you.
Instead, find the contact information for the government office in charge of business formation in your state. (In most states, this is the Secretary of State’s office.) You may have to wait on hold for a few minutes, but you should be able to reach an actual human being who can tell you whether the letter is legitimate and whether your business is actually required to take any action or pay any fees.
Reporting the solicitation to the Secretary of State
Once you’ve determined that the letter is a scam, you might decide to report the misleading solicitation to your Secretary of State or Attorney General. State agencies will send out warnings to business owners when they know these solicitation letters are circulating. They may even fine the company or take legal action if they find the company is being unlawfully deceptive.
If you have already paid money to a company that sent you a misleading solicitation, you may be able to get a refund by contacting your Secretary of State or Attorney General.
How can I avoid getting misleading solicitation letters in the first place?
Typically, the companies that send these misleading solicitations mine business information that’s on the public record—meaning, it’s on the state government’s online corporate database. When you submit your LLC Articles of Organization or Articles of Incorporation to the state, the names and addresses on the form go on the public record, which is how these companies are able to mail you misleading solicitations that contain specific information about your business.
The best way to cut down on the amount of spam mail you receive is to avoid sharing your own address on public forms whenever possible. You can do this by hiring a professional registered agent who will allow you to use their address in place of yours on public forms. When you hire Northwest as your registered agent, we’ll let you use our address as your business address wherever allowed. And we’ll automatically shred your spam mail so you don’t even need to think about it.
