In an age of technology Small businesses are increasingly targeted by sophisticated new scammers looking to exploit their limited resources and experience through a range of new schemes. Here is a list of some common scams targeting small businesses:
1. Fake Invoice Scam
Scammers send fake invoices for products or services never ordered. These can look legitimate, making it easy for busy business owners to pay without verifying.
Tip: Always verify invoices with the vendor before making payments.
2. Phishing Email Scam
These emails appear to be from trusted sources, like banks or suppliers, asking for sensitive information. Clicking on links or downloading attachments can lead to data breaches.
Tip: Double-check email addresses and never click on suspicious links. If you think that an email may not be a scam, always navigate to the page directly in your browser. Do not click the link in the email.
3. Directory Listing Scam
Businesses are asked to pay for listings in directories that don’t exist or have no value. These scams often pressure businesses with fake deadlines.
Tip: Research any directory service before agreeing to pay. A quick search of the name of the directory with the word scam should generate results that will show other consumer experiences with that site or business.
4. Tech Support Scam
Scammers pose as tech support, claiming your systems are compromised. They may ask for remote access or payment for unnecessary services.
Tip: Verify the identity of tech support before granting access or making payments. Contact the software or system provider that is stated as compromised to determine if the tech support agency is one contracted by the provider.
5. Overpayment/Payment Cancellation Scam
A scammer overpays for a product or service and asks for a refund of the excess amount. Or, a scammer agrees to a product or service, pretends to send payment and then cancels the service but agrees to give you a generous fee for the trouble. The scammer’s payment is fake, leaving the business out of pocket. This scam is used across many industries and is easy to identify once you look for the signs.
Overpayment scammers will usually contract for a service or product and agree to payment terms. A scammer will send a check or a faked confirmation that the funds were sent through Paypal, Zelle or other forms of electronic payment. Scammers will then give an excuse for overpayment or will need to quickly cancel the products or services. They will ask that you remit back the funds, less the funds necessary for payment of the service or product or will ask that you remit back the funds less a generous fee for your troubles. The fake payment, whether check or electronic, will not go through leaving the victim out of pocket whatever funds were returned to the scammer.
Tip: Overpay scammers utilize short lead times as a necessity and utilize overpayments of hundreds to thousands of dollars. If the buyer is pressing for a repayment of funds remitted prior to cancellation or for overpayment, first verify that the funds were actually received. Do not issue any refunds until you have proof the funds have cleared your bank. Don’t allow scammers to pressure you with threats or promises of generous fees. If something is too good to be true, it usually is and a promise of $1500.00 for refunding a cancelled contract for services you didn’t perform may sound wonderful but is very often a scammer baiting the hook.
6. Business Loan Scams
Offers for quick loans with low interest rates can be tempting. Scammers may ask for upfront fees or personal information.
Tip: Research lenders thoroughly and be wary of upfront fees. Start with the bank you have a business account with if you are in need of a business loan. Also check with the SBA as they generally have the most favorable rates for small business loans.
Conclusion
Staying informed and vigilant is key to protecting your small business from scams. Implementing verification processes and educating your team can help safeguard your business. If you have been subject to a scam targeting your small business, we’d like to hear about it. Feel free to comment on this post with your small business scam story. Your experience with scammers can help other small business owners avoid theft.
