Common Small Business Scams

1. Common Small Business Scams

2. Small businesses are prime targets for frauds. This is due to many factors, but the why isn’t what matters as much as the “how” of preventing small businesses from falling prey. The best course of action is education. If you know what the common scams are, you are much more able to avoid them. What are some of the most common scams, and how can small businesses avoid falling for them?

3. Over Payment This one can really sneak up on business owners as it appears to be a successful sale. The customer calls and places a large order, and typically the business owner is excited. They pay by check, and when the check comes it is written for more than is due. The customer then asks the business to return the amount that the check is over as a refund. This is where things get sketchy. The business deposits the check and sends funds back to the customer, but their original check was not actually good in the first place. Eventually it bounces and the business is left covering the entire amount, while the “customer” makes off with the product and the extra funds.

4. Phishing Scams are hard to see coming by their very nature, but this one catches even some of the most diligent businesses off guard. It begins with an email that looks totally legitimate and professional. It may appear to be from your bank or a service that you use. Most of the time it will note that there has been a problem with something, and they need you to click a link to fix it. The link will take you to a website that looks legit, but it isn’t. Either the link will upload a virus to your computer that will steal your information, or you will be asked to enter information in an effort to clear up whatever problem they say they are having. Once you do enter it the scammers have your information, which often includes credit card or bank account information

5. Awards This one plays to basic human vanity by telling the business they have won an award. They will be listed in a book, or some sort of publication or website, or receive a certificate, or some combination of these things. The catch is, they request a “small” fee to cover shipping or publishing. The fee may be a one-time thing, or it may be an annual fee, which is most often the case. There may or may not be a publication, but they will have your funds and the award is likely just made up. Remember, a legitimate award will not cost you anything. When it comes to avoiding scams, remember that no legitimate company will ask for account information through an email, awards do not cost money, it is not hard to write a check for the correct amount. Pay attention to these simple red flags and stay alert.

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