When owning a small business or part of a non-profit organization, it takes a lot of time and effort to ensure it runs smoothly. However, when scammers go after your organization, it can hurt your reputation and bottom line. Stay protected by learning the signs of scams that target businesses.
COMMON SCAMS TARGETING SMALL BUSINESSES*
- Fake Invoices Scams- Scammer creates phony invoices that look like they’re for products or services your business uses. By choosing a product or service that is critical for your business, they trick the victim into paying right away.
- Unordered Office Supplies and Products- Scammer calls pretending to be a company that needs to confirm an existing order purchased. If confirmed, unordered merchandise arrives to the victim’s doorstep followed by high-pressure demands to pay.
- Directory Listing and Advertising- Scammer tries to trick a business into paying for nonexistent advertising or a listing in a nonexistent directory. They convince you by saying it is free, but then send a bill at a later time with pressure to pay.
- Utility Company Imposter Scams- Scammer pretends to call from a gas, electric, or water company saying your service is about to be interrupted. They try to scare you into paying a late bill must be paid immediately through wire transfer or a money card.
- Government Agency Imposter Scams- Scammer impersonates government agents, threatening to suspend business licenses, impose fines, or even take legal action if you don’t pay taxes, renew government licenses or registrations, or other fees. Businesses have received letters, often claiming to be from the U.S. Patent and Trademark Office, warning that they’ll lose their trademarks if they don’t pay a fee immediately, or saying that they owe money for additional registration services.
- Tech Support Scams- Scammer starts with calling or sending an alarming pop-up message pretending to be from a well-known company. They inform of a problem with your businesses’ computer security. By pretending to fix an issue, they are able to gain access to your computer, credit card information, data records, and potentially steal the businesses’ money.
- Social Engineering, Phishing and Ransomware- Scammer tricks employees into giving up confidential or sensitive information, such as passwords or bank information. They do so through a phishing email, social media contact, or a call pretending to be from a trusted source. They persuade the victim to wire money or provide access to company information.
- Business Promotion and Coaching Scams- Scammer tries to sell bogus business coaching and internet promotion services. They do this by using fake testimonials, videos, presentations, and telemarketing calls promising amazing results and market research for people who pay their fees.
- Changing Online Reviews- Scammer claims they can replace negative reviews of your product or service, or boost your scores on rating sites. Posting fake reviews is illegal.
- Credit Card Processing and Equipment Leasing Scams- Scammer deceptively promises lower rates for processing credit card transactions or better deals on equipment leasing. They resort to fine print, half-truths, or flat-out lies to get a business owner’s signature on a contract.
- Fake Check Scams- Scammer overpays with a check and asks the business to wire extra money to a third party. They come up with a bogus story to explain the overpayment. By the time the bank discovers the business has deposited a bad check, the scammer already has the money that was sent to them.
- Pretends to be someone you trust- A scammer make themselves seem believable by pretending to be connected with a company you know or a government agency.
- Creates a sense of urgency- A scammer rushes you into making a quick decision before you look into it.
- Uses intimidation and fear- A scammer tells you that something terrible is about to happen to get you to send a payment before you have a chance to check out their claims.
- Uses untraceable payment methods- A scammer often wants payment through wire transfers, reloadable cards, or gift cards that are nearly impossible to reverse or track.
WAYS TO PROTECT YOUR BUSINESS
TRAIN YOUR EMPLOYEES
- Educate your employees on the signs and types of scams that could potentially harm your business.
- Encourage them to speak up if they spot a scam.
- Train your employees not to send passwords or sensitive information by email, even if it seems to be from a manager.
VERIFY INVOICES AND PAYMENTS
- Check all invoices closely and never pay unless you know the bill is for a legitimate order that has been delivered.
- Make sure procedures are clear for approving invoices or expenditures.
- Pay attention to how someone asks you to pay. If asked to pay with a wire transfer, reloadable card, or gift card, it is very likely to be a scam.
- Don’t trust your caller ID. Scammers often fake caller ID information to make you believe the caller is from a government agency or a vendor you trust.
- Stop and think before you click. Remember that email addresses and websites that look legitimate are easy for scammers to fake. Don’t open attachments or download files from unexpected emails.
- Secure your businesses files, passwords, and financial information.
KNOW WHO YOU’RE DEALING WITH
- Before doing business with a new company, search the company’s name online with the term “scam” or “complaint” to verify if legitimate or not.
- Ask for recommendations from other business owners of products and services for your business.
- Don’t pay for “free” information.
If your small business suspects or becomes the victim of a scam, report it to ReportFraud.ftc.gov.