Is this a scam? (Legal dopers' advice appreciated.)

Factual Questions
1

Okay, we all know that in 99% of threads with this title, it really **is **a scam. This time it’s not so clear, I promise.

I run a small business from my home in Maryland. I’ve never lived, worked, or had a business in Pennsylvania. But I’ve just received a second notice from something called the Revenue Collection Bureau, Inc., in Philadelphia, addressed to my business, and referencing my Federal EIN. (The first arrived a few weeks ago, and I threw it out.) RCB claims to have been retained by the City of Philadelphia for tax compliance, and says I can verify its status as a vendor to the city at the city Web site. (Checking the link they provide shows they had a contract with zero dollar value that ended on 12/31/08.)

The letter says that my company turned up in a search of records as being “non-compliant with Title 19 of the Philadelphia Code relating to the acquisition of a business privilege license and/or the filing of requisite tax returns promulgated thereunder.”

Now, there is no more reason why I should have a business license from, or pay taxes to, Philadelphia than Timbuktu. And yet this outfit wants me to provide tax information for the years 1998 through 2008 within thirty days. They add, “If you believe you have not done business with the City of Philadelphia, you need only complete the Nexus Questionnaire…” which asks ten questions about whether I’ve done business in or with the city of Philadelphia.

They close the letter with the following threat: “…If you believe that this letter has been sent to you in error… because you have conducted no business within Philadelphia…please DO NOT disregard this letter. Your failure to provide the necessary information or to respond in a timely manner shall result in a code enforcement action being filed against you in Philadelphia’s Municipal Court to compel compliance and seek monetary sanctions.”

It strikes me as a fishing expedition, and I don’t see why I should spend any time cooperating when they have presented no evidence of any connection to Philadelphia. If they can pull this shit, what’s to stop any municipality in the country from sending out similar letters expecting me to waste my time in the hope they can shake some dough out of me.

It probably wouldn’t take much time to fill out and return the damn questionnaire, but I resent the apparently random nature of the approach, and I’m inclined not to cooperate on principle. Also, I’m worried that sending in the form might not be the end of it.

What do you think? I know you’re not my lawyer, etc.

2

You mention checking a link that they provided. That link may not go where it purports to, this is a common fraud tactic.

Have you tried contacting the city of Philadelphia yourself? Don’t use any website or number that the RCB sent you. Find out from the city whether they have any reason to be associated with this. I certainly wouldn’t send anything at all in any way, shape or form to anybody without doing that first.

3

Have you contacted officials in Philadelphia? They may know whether or not it’s a scam.

It does sound like a fishing expedition. If they were serious, the letter would have arrived certified so they could confirm you received it.

4

The link in the letter really is the city of Philadelphia’s Web site: www.phila.gov. Click on Contracts Online at the bottom right, which takes you to this page: https://ework.phila.gov/econtractphilly/ (whose links don’t work in Firefox). Then (using MSIE) click on Contract Renewals, where Renewal Collections Bureau is shown as having had a contract from 1/1/08 to 12/31/08, that presumably was renewed.

I suppose I could try to reach someone in the tax office and see what they say.

5

This is the way to go.

I know many states and municipalities are hiring collection firms like this one to chase tax debts. In my limited experience, these firms are just like any other debt collection firm. They don’t give a crap if you really owe the money or not as long as they’ve got some data point that says you might. My company actually had a similar experience with a debt collector retained by the state of Pennsylvania. The collector was an absolute jerk about the whole thing, so I went around him, sent a letter to the taxing authority, and settled for a tiny portion of the debt, which we did (sort of) owe.

6

Well, someone in the city law department confirmed that RCB works for the city, and a call to RCB revealed that because in 2005 I had received a 1099 from Disney (which apparently has a business license in Philadelphia), the city had my company’s info. This despite the fact that my Disney customers were all in California, not in Pennsylvania, and I have no connection whatsoever with Philadelphia.

It is a fishing expedition, an officially sanctioned one, and it pisses me off.

But I’m sending in the damn form. And I’ll probably write a hot letter to the mayor, not that I expect it will do any good.

7

Sigh. Yeah. About what I’d expected. Sorry.

8

deleted.

9

The thing is, if RCB got a list of everyone who’s received a 1099 from the Walt Disney Company/ABC (to say nothing of every other major corporation that has a business license in Philadelphia), they must have tens or hundreds of thousands of records, most of which are outside Pennsylvania, and almost certainly have no connection to the city. If they’ve sent a similar letter to all of them without discrimination, they’ve wasted thousands of man-hours of small businessmen like me with their fishing expedition.

Could this be grounds for a decent class-action suit?

10

Send them a letter and a bill for $250 for your time. And send the bill to collections if they don’t pay.

11

Brilliant!

12

Absolutely. I’m sure someone at City Hall said, “I know where we can make up the budget shortfall. Let’s have somebody mine old 1099s for possible activity that counts as doing business in PA. Then we’ll have a collection agency chase everybody on that list.”

It’s worth contacting a lawyer about. I don’t think you’d get anything for wasted time, but there might be statutory damages available, depending on the facts. I’m not optimistic, but you could probably find a lawyer to look at the case for free.

13

This is not intended as advice, because if I am wrong (and I might well be!), it could be exceptionally expensive and or burdensome for you, but …

If their only scintilla of evidence that you may owe a Philadelphia business tax is a 2005 1099 from Disney and you have never transacted business or advertised your goods/services in Pennsylvania, then (1) it is profoundly impractical to sue, and (2) there are considerable jurisdictional doubts. I.e., they’re not going to sue you. I’d throw the letter in the gar-bitch, but then again, I can be pretty ballsy.

14

Standard disclaimers apply.

I agree with **Kimmy ** mostly, but I’ll give you two good practical reasons not to just ignore the letter:

  1. If they did sue you in PA, it would cause you lots of grief. You’d have to defend the case, and if you didn’t, the judgment could come back to haunt you, valid or not. In the case I mentioned earlier, the collector–not the agency–recorded liens against our company. It’s also not really that impractical for them to start a code enforcement action. The City probably has a few code enforcement lawyers who file them, and the judge would be extremely unlikely to sanction them, even if the case was baseless.

  2. If you don’t get it resolved, you can expect to get contacted by the next collection agency to which they assign these debts. While you can toss letters from these folks, they’ll probably start calling and wasting more of your time. The one I dealt with simply kept repeating, “but you owe the money.” I had my own mantra, which made it unpleasant for him to continue the conversation. :wink:

15

please, please, please what is the mantra that is like kryptonite to collectors?

16

This reminds me of a problem a friend of mine had with the Australian taxation authorities. They sent him a letter telling him that they had decided that certain deductions he had claimed, as a farm owner, would not be allowed because he didn’t derive enough income from farming. These periods were backdated many years.

Fortunately his sister worked for the tax office. She checked the letter, told him that the office’s ruling was wrong and said to tell them to get stuffed.

After a while he started receiving letters offering to settle the debt for smaller amounts. His sister kept telling him to tell them to get stuffed.

Eventually he received a letter informing him that his claim was fully allowed.

What was most reprehensible about this was that, had he not had someone to check with, he could have paid any of the amounts they wrongly claimed and never known he was conned by a government fishing expedition.

17

I had good success with writing a snail mail letter, saying that I disputed the debt, I was to be only contacted by US mail, and that I challenged the collection company to prove the debt. I was receiving phone calls from a collection company trying to collect on an old debt that had been paid off years ago. They claimed that we owed quite a bit, but they were willing to settle for a reduced amount, just to get it done with. I copied the FTC on the letter, noted that they had already been found guilty of deceptive practices, and generally put them on notice that I was not a sucker to be easily fleeced. I sent this registered mail, receipt requested, to the company HQ, NOT to the address they sent me. The phone calls stopped, and I never heard another peep out of them.

I don’t like to discuss these issues over the phone, and by requiring them to send information by US mail, I had evidence of what they said. It also adds another layer of protection, as trying to defraud someone by US mail carries its own penalties.

YMMV, IANAL, etc., etc.

18

Write a debt validation letter. Google this and you will find numerous examples. I have used this successfully several times against debt collectors. It basically says, send me written proof or evidence of a debt I owe, and if you cannot, then you must drop this matter and cease all communications. It is very effective.

19

I strongly agree that the correct approach is to categorically reject the implication that the burden lies with you to prove you don’t owe the debt. The burden of proof entirely lies with the City of Philadelphia.

20

The first few google hits on that are some real eye openers on debt collection laws and such, creditinfocenter.com looks like its got enough info to go into business doing credit repair just from reading a few pages.