How to avoid falling for photocopier contract scams in 2021

The office equipment industry is rife with scammers duping unsuspecting businesses, schools, and non-profits into signing up for a ‘great deal’ and stinging them with crippling hidden charges further down the line.

If you think we’re over-egging the extent of the problem, sadly, that’s not the case. With 53 years in the industry, we have unrivalled experience in this field and believe the level of scamming is worse than ever. Some dealers are constantly changing tactics and revamping old scam ideas to lock you into expensive and dishonest financial arrangements.

We’re working with clients every day who have been ripped off for ￡￡￡s and whose businesses are at the brink of collapse because of it.

But contract and service agreement terms are complicated so it can be difficult for the layman to see clearly what they are signing up to. It is easy to get duped and the scammer knows that.

How you can protect yourself from being scammed.

Fair Contract Associates has been checking and renegotiating contracts for our clients for many years. Below are some of the key points to remember before you sign up to any contract or service agreement.

1.     Contracts are complicated

Contracts don’t have to be complicated though. Often dealers make them deliberately so – it is part of the tactics to get you to sign on the line – they are banking on you not being able to work out the dubious arrangements they have slipped in there. If you don’t 100% understand what’s in your contract, then do not sign it until you do.

2.     The sales rep does not have your best interests at heart

Sales reps are generally good sales people – that doesn’t mean they are good business people. They will almost always be your best friend and make all the right noises around helping you get a great deal, but they won’t necessarily understand, or care, what’s best for your business. Remember, they are coming at the deal from a sales frame of mind – with their number 1 priority being to get a signature on the contract. Sales reps are typically paid a low basic salary and a commission (often substantial). So they are looking for a sale at all cost (usually to you). More and more equipment engineers are now setting up independent businesses to offer customers an honest alternative to the slick, high-powered sales approaches practiced by some of the industry giants. In our experience, a customer always gets a better deal when sold to by an engineer that knows their stuff, knows the true capabilities of equipment and can give you qualified advice on the equipment you need, rather than a salesman who is just in it for the commission. If you are looking for a dealer, check out our approved supplier list.

3.     Recommended retail prices of office equipment (RRP)

Typically in this industry, there are massive mark-ups from the manufacturer price to RRP on office equipment – up to 70% is fairly commonplace. So be careful not to fall for any ‘discount’ offers as prices have almost certainly been artificially inflated even further to be able to offer the discount to you in the first place. The profit is then split between the salesperson and the dealer to enjoy.

4.     Red flag contract terms to be wary of

There are many ways customers get duped with their office equipment contracts and service agreements – too many to explain in detail in one article. But here are some of the red flag terms to beware of:

5.     Bulk free

This is like an ‘all-inclusive’ service where you pay one price and get a number of copies ‘free’. Sounds nice and simple but nothing is free and most people end up paying 2, 3, or 4 times what they would do otherwise in lease or rental payments to cover the cost.

6.     Copy costs

Never wrap your agreement into a per-copy cost deal. This arrangement almost always ends up being far more expensive and your finance agreement can then become variable. Always opt for a fixed-term lease or a capped agreement to lock in the price you’ve negotiated.

7.     Ancillary charges

You might find these slipped in under any number of guises – look out for ‘agreement’, ‘data wipe’ ‘collection’ ‘annual’ and ‘end of term’ fee charges and make sure you understand exactly what they are, how they will be applied, and the amount you’ll incur.

8.     Price rises

Prices do go up so a price rise in your service agreement is acceptable. However, you should expect no more than one price rise every 12 months and this will ideally be capped at 10%. Anything beyond that and you should be concerned.

9.     Service contracts

Many customers believe a service contract is mandatory with the lease or purchase of their office equipment. Not so. You don’t need a service agreement with the dealer you obtained the equipment from, the manufacturer, or in fact anyone at all. There are many service engineers out there who operate on a one-off call-out basis to repair or service machines as and when needed so there is no need to tie yourself in. And if you do have a service agreement, it should never overrun the period of the lease agreement (but often does).

Fair Contract Associates offers a low-cost contract checking service (￡190) where we can go through your paperwork for you and flag up any areas of concern before you sign. We will never charge you unless we know we can help you save money. Schedule a call to get peace of mind that you have a fair contract in place.

Think you’ve been scammed? Download our free guide 5 Ways To Spot If You’ve Been Scammed for the warning signs you need to be aware of.