As if running a business in today’s economy is not tough enough, we also have to deal with fraud on top of it all. Fraud can cause a small business to experience financial effects as well as damage to your hard earned reputation.
Every year the BBB receives thousands of complaints from small business owners who fell for an invoicing scam or were misled into paying for products and services they didn’t want. Scammers aren’t always trying to steal money from a business; sometimes they are after a company’s financial or customer data and will use many kinds of high and low-tech methods for getting it.
Here is a list of “7 Scams That Target Small Businesses” recently published by the Better Business Bureau.
- Directory Scams – To put it simply, this is when a person contacts you asking for verification on the allegedly phone listing you or one of your employees ordered. Because they already know your company’s information, this may seem legit as they might use the reason that they’re working for the Yellow Pages or some other known company and that you are currently in their list. Once you have “verified” the company information, you would be surprised that they have already sent you an invoice for their directory listing services. You would of course refuse to pay because you never did order anything of the sort. However, perpetrators of this scam would go even to the lengths of sending a threat of legal action to be taken against you and your company. They may even forward this so-called invoice to a debt-collection agency. The result: your credit rating would suffer.
- Office Supply Scams – Small businesses have a relatively small need for office supplies. But that does not stop scammers. If you are guilty of sometimes overlooking things just because you don’t want to sweat the small stuff, then you might fall victim to this scam, if you haven’t already. There are office supply companies who may add items to your invoice. Admittedly, it would not be too big of a deal for just one invoice but when you think about it, how many products you did not order are billed to you in a year’s time? Still think it’s a small price to pay? Think again!
- Overpayment scams – This is done when customers give you a check for a bigger amount than that of their bill. Sometimes, they also use this tactic on credit cards and they would just ask you to give them back the extra money. Word of advice: Don’t.
- Data Breach – One of the common scams since we have all entered the digital age. It may be done unconsciously or not but the effect is still the same.
- Vanity Awards – Nothing can boost someones ego more than by getting an award. However, scammers are taking advantage of people’s seeming need to be recognized. Scams against vanity awards are done by bogus organizations and they would tell you that you are being given a business or leadership award.
- Stolen Identity – Posing as a legitimate organization, scammers would steal your customers’ identity. Your customers would lose money but the biggest impact of it would be on your company because your reputation would be on the line ad customers would tend to think that the real company (yours) is the one to blame.
- Phishing E-mails – No matter how much you filter your emails, there always seem to be ways that hackers can send you messages which can catch your attention, especially if they use a familiar name or a subject related to taxes or complaints against your company. This is a way to hack into your system.
Small business owners should be wary of these scams. Operating a small business is not a trip in the park. You have to stay on top of things. Otherwise, what you have been working hard for may go down the drain.
Of course you would not lose everything all at once, but small things do add up. Doing a little research prior to making any business decision may save you countless future headaches.