Business Identity Theft Defrauds Small Business Owners and Dupes Their Customers

Oct 10, 2012

I have a story that everybody, especially small business owners that are trying to grow their business, should be interested in, because it involves business identity theft:  A large internet marketing company called Service Magic has been robbing small businesses across the country by posting counterfeit ads, web-links, and phone numbers that appear to belong to legitimate local businesses.  My roofing company ABC Roofing, along with some other Greensboro roofing companies, High Point roofing contractors, and other companies roofing in Winston Salem NC and vicinity, are victims.

I discovered it by chance when my yellow page rep was visiting and casually showed me the 1st page Google search results for “ABC Roofing Greensboro”, and how ABC Roofing had several positions on the first page.  Something made me take a second look: it was the 866 (toll-free) phone number in two of my ads that had caught my eye.  Our business address in all of the ads was correct, but the toll-free phone number was alarming, because…  we did not have a toll-free number, other than for incoming faxes.  So I thought maybe somebody wasn’t paying attention and entered our fax number instead of our phone number.  I recalled my fax number from memory, but it didn’t match the number displayed in my ad.

I called the number in my ABC Roofing ad to see what would happen, and to my surprise, a company called Service Magic answered the phone.  I said I was looking for ABC Roofing and was told by the person who answered that “…ABC Roofing is not taking on any more work at this time,” and that “ABC Roofing had hired Service Magic to answer the phones and to help ABC Roofing’s customers find a different roofing contractor to help them with their project.”  This was all blatantly untrue.

I was speechless.  I hung up and then called back after I took some time to regroup.  A different person answered this time, and fed me the same story, but this time I recorded it for posterity.  The Better Business Bureau didn’t believe me until they did their own internet search for “abc roofing” along with a more neutral search for roofing contractors using random search terms such as “greensboro roofing”, “roofing winston salem”, and “high point roofing”, and then calling the 866 numbers, and asking for ABC Roofing.  At which point they were given the same run-a-round.

Here’s the insidious part:  ABC Roofing had previously entered into an agreement to buy leads from Service Magic.  The company is a large internet marketing firm that generates its revenue by finding homeowners who are looking for a reputable home improvement contractor and then selling the homeowners’ information to  four or five reputable contractors, roofing or otherwise, who will then compete for the work.  Nothing wrong with that.  But here is where the business identity theft comes in: what Service Magic doesn’t tell the business owner is this: They will create counterfeit ads using your company’s name and address, and will use these ads to steal away from you the customers who already know of your company and are searching for you by name, and the customer information that they thus steal from you they will then sell to your competitors.

When confronted, Service Magic claimed that our agreement gives them permission to do this, and would not remove the ads.  I had to make a lot of noise at AT&T, yellowpages.com, citysearch.com, 411.com, etc., which are some of the search networks through which the counterfeit ads were placed, before the fake ABC Roofing ads were finally removed.

Service Magic has been harming hundreds, if not thousands of small businesses across the U.S., not just triad roofing companies.  On behalf of all of us who have fallen into the Service Magic business identity theft trap, we apologize to our former clients and potential customers who tried to contact us directly but were hijacked by Service Magic, who then told you we didn’t want your business.  To set the record straight: We are still here for you, we want your business, and hope that we can continue serving you.