Don't become a willing victim . . .

There are unscrupulous folks looking to separate churches from their precious Kingdom work resources

Max H Herr

7/8/20225 min read

In this day and age, it never ceases to amaze me at the many ways businesses and individuals can be fooled into parting with hard-earned money. From the late-night phone calls purporting to be a grandchild who needs money to get bailed out of jail, to telemarketers selling auto warranties (unlawful in California!), to phony invoices for "Yellow Book" advertisements for businesses, to phone scammers trying to convince folks the IRS is after them for unpaid taxes (the IRS never initiates those kind of phone calls), the list is virtually endless.

Newly incorporated churches and businesses soon find their mail includes official looking forms that invite the recipients to pay excessive amounts of money for services that are important, but can be had for significantly smaller amounts or just a filing fee. For example, once a new church corporation is approved, it has 90 days to file its first "Statement of Information" with the Secretary of State. This is actually a critical bit of corporate compliance that must be repeated every two years -- failure to file the "SI-100" will lead to suspension of the church corporation (and the loss of all legal protection to the corporation) and if not filed after four years can also result in administrative dissolution by the Franchise Tax Board . . . the church corporation will no longer exist and would have to be incorporated all over again.

But the cost to file a Statement of Information is only $20. CMCC adds a nominal "convenience fee" of $5 when we are asked to represent a church as its Agent for Service of Process. But there are "companies" offering to do this for $150 or more, and they don't event act as the Agent for Service of Process. It's not exactly a "scam" because they actually file the document, but it is an abusive scheme because they pocket $130 or more of your church's resources for its Kingdom work. There are also legitimate companies that will act as your Agent for Service of Process and will file your SI-100, but they charge $199 per year or more for the privilege. Again, CMCC offers to do the same thing for just $5 every two years. any your church has $125 to devote to God's work in your community. Check out these examples of the Statement of Information scheme . . . (** NOTE: There is no legal requirement to file a "Declaration of Directors" . . . this is an egregious new scheme!)

Another abusive scheme involves the sale of labor law posters. A business or church that has employees is supposed to post a number of required federal and state labor notices for its employees . . . from federal and state minimum hourly wages, to paid sick leave requirements, to anti-discrimination and sexual harassment laws, and many more. And, unfortunately, these posters need to be changed at least once each year, because most labor law changes occur on January 1, and occasionally on July 1. Emergency changes can also happen at any time of the year.

And, yes, a church could be fined a substantial amount of money for failure to post the required notices . . . but there is no "active" enforcement taking place until a complaint is filed. If your church does have one or more employees other than the pastor, you absolutely need to hang the notices where your employees can see them.

But unlike the two examples below, you do not need to pay $85.25 or $125.00 for the "combined" federal and state posters. If you wanted to take the time to do so, every one of the notices is freely available from the federal and state governments for download and printing. You can also save several hours of effort by purchasing the "combined" posters from legitimate vendors for as little as $20-$40 at the beginning of each year -- there's no need to pay more, even to legitimate vendors. You also don't need to pay extra for "poster update" services . . . if any additional laws pop up on July 1 or at any other time, those notices will be made available for download and printing, and can be tacked or taped to the existing poster.

These two examples of labor law poster schemes are the most common ones seen by churches and other businesses in California. The addresses are both located at UPS Stores that offer "private mailboxes" (aka "Suite XXX").

One more new scheme popped into my own mailbox a day or two ago, offering a "Certificate of Status" from the California Secretary of State. A "Certificate" is an official document that can be used to show a bank or credit union that your corporation is in good standing with the State in order to open a bank account. A copy of your Articles of Incorporation will do the same thing in most cases. Articles of Incorporation can be downloaded from the Secretary of State's website at no charge, and a Certificate of Status can be obtained for a $5 fee paid by VISA or MasterCard branded credit or debit card. There is no reason to pay $87.25 for a Certificate if you need one. This outfit's address is another UPS Store in San Francisco.

=======================================================Update: July 12, 2022 . . . The schemes just keep coming! This one has been forwarded to us by a client, and asks for $288.00 for the privilege of being listed on a "website directory." It's a twist on the "Yellow Book" phony invoice scam. No one who operates a website needs to have it listed in an "online directory." When was the last time you went looking for a website in an online directory? Probably never. It's an official-looking invoice, and when received by a clerical employee, it might get sent on to the Treasurer for payment, as if it were something actually owed. But look at what it really says . . .


CMCC wants you to know that you can always contact us whenever you get a suspicious looking solicitation or unexpected invoice in the mail to find out if it's a legitimate piece of correspondence or a scheme or a scam to be avoided.

We also assist new churches with obtaining Federal Employer Identification Numbers (FEIN/EIN), filing Articles of Incorporation, corporate name changes, and filing merger documents . . . for a "convenience fee" of just $5. No need to pay hundreds of dollars for these simple services. Just call us! 909.618.4841 We're available 24/7!