Scams that Target Small Business Owners
For small business owners, becoming a victim of fraud can cost them dearly, not only in money but in the negative impact on their business’s reputation. Fraud can come from many different sources—both internally as with employee fraud and externally from full-time scammers. Unfortunately, because small business owners often lack the time and resources to fight fraud, they are popular targets. The Better Business Bureau (BBB) warns business owners to be vigilant against these common scams.
1. Directory Scams
A problem that has plagued businesses for decades involves deceptive sales for directories. Commonly, the scammer will call the business claiming they just want to update the company’s entry in an online or print directory. The business is later billed hundreds of dollars for listing services they didn’t agree to.
2. Office Supply Scams
Some scammers prey on small business owners, hoping they won’t notice an “extra” bill for office supplies like toner or paper that the company never ordered. Small business owners can be deceived and billed for products they didn’t want, didn’t order, and never received.
3. Overpayment Scams
Be extremely cautious if a customer overpays using a check or credit card and then asks you to wire the extra money back to them or to a third party. Overpayment scams target any number of different companies including catering businesses, manufacturers, wholesalers, and even sellers on sites like eBay and Craigslist.
4. Data Breaches
No matter how vigilant your company is, a data breach can still happen. Whether it’s the result of hackers, negligence, or a disgruntled employee, a data breach can have a severe impact on the level of trust customers have in your business. Learn how to defend yourself and your company.
5. Vanity Awards
While it’s flattering to be recognized for your hard work, some awards are just money-making schemes and have no actual merit. If you are approached about receiving a business or leadership award, research the opportunity carefully and be wary if you’re asked to pay money.
6. Stolen Identity
Scammers will pose as a legitimate small business for the purpose of ripping off consumers. The company doesn’t necessarily lose money, but their reputation is tarnished as angry customers who were ripped off by the scammers think the real company is responsible.
7. Phishing E-mails
Some phishing e-mails specifically target small business owners with the goal of hacking into their computer or network and/or capturing personal information. Common examples include e-mails pretending to be from the IRS claiming the company is being audited, or phony e-mails from the BBB saying the company has received a complaint. If you receive a suspicious e-mail, don’t click on any links or open any attachments. Contact the agency directly by phone to check out the legitimacy of the e-mail.