Scams (Old and New) That Target Small Business Owners

Just because your a small business owner doesn’t make you safe from money-hungry scammers looking to separate you from your hard-earned cash. As technology improves, scams become more elaborate.

Following, you’ll find some of the most popular scams – those which seem simple on the surface, yet still dupe thousands of unsuspecting businesses each year.


Directory Scams

Criminals know how badly you want to increase/maintain your marketing reach, so they use the good ol directory scam.

They might call, fax, email or otherwise solicit you indicating that it’s time to get your business listed in the back of the local phone book, or an applicable business directory of some sort.

Many of these scammers use a proven formula: First contacting you to confirm your business name and phone number. After confirmation, they’ll send you an official-looking invoice requesting your payment before including your listing. After you pay, you’ll never hear from them ever again, obviously.

With the Internet age, you have to be even more hyper-vigilant because there are tons of crooks trying to exploit you with promises of increased business from poorly maintained or downright bogus online directories.

Read the following story to learn more about how these scammers operate and warning signs to watch out for:

Vanity Award Scam

What business owner would ever refuse a prestigious award? Winning an industry award or recognition for your charitable efforts will surely give your business a massive boost, right?

There are so many variations to this scam that it’s really up to you to perform your due-diligence and ensure that the award you’re being contacted about is genuine.

A typical award scam will include a phone call, email, fax, letter, or in-person contact from someone telling you that you’ve won a “best of” type of award that’s to be featured in “XYZ Magazine” or on a popular radio, television, or podcast program. Inevitably, these scammers will use your initial excitement at winning to lull you into paying an “inclusion” or “marketing” fee of some sort to expedite the process.

In other scenarios, the scammer might offer you a plaque, trophy, or framed paperwork that you can display in your business to show off to potential customers. There’s always a fee involved. As you can expect, you’ll never hear from them after paying.

More info:

Phishing Scams

Phishing scams are sent via email. The type of business you run will usually determine the best course of action for the seasoned small business scammer. If you run a food service business, they might send you an email claiming to be from the Better Business Bureau or local Chamber of Commerce, telling you they’ve received a complaint and that it’s imperative you respond immediately via clicking a “link” provided within the email.

After said link is clicked, your business’s computer(s) and network will be compromised with malware of some sort that’s designed to steal sensitive info.

Don’t take the possibilty of this happening to you lightly. It doesn’t matter how good your network security or personal firewall is, because you don’t know how clever the hacker who’s trying to infect your computer and steal sensitive data is (see this story.) Customer information, including credit card info, social security numbers, address, financials, etc., are all at risk if you click your way into a phishing scam.

Learn more about spotting and protecting against small business phishing scams:

Overpayment Scam

This one has been around forever. Though new methods to scam you have been used by scammers over the years, the basics are the same.

First, this is a scam that only really works with check payments – though it’s possible for this to happen with online payment processors if you’re not careful.

If you’re a business owner that sells moderately pricey to expensive items or services, the scammer will send a check for more than that product or service actually costs. After “realizing” their mistake, or you bringing it to their attention, they’ll ask you to send the difference back to them (usually via a wire transfer), or they’ll come directly to your business and collect the balance in person.

If you resist, they might even give you a hard-luck story about how they made a huge mistake and will lose their apartment, starve, lose their kids, their business will fail, etc. – if they can’t get that extra money back from you right away.

You should always be mindful of overpayments. If someone sends you a check for too much money, tell them you’re shredding it right away and that they must send you a new one for the correct amount. Overpayments through online payment processors like Paypal should be handled similarly: refund their money and tell them to pay again with the amount the product or service actually costs.

More reading:

Photo credit: David Goehring


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