Protect Your Small Business From Scammers


Scams are everywhere these days, and everyone is a potential target. While we hear a lot about high-tech scammers who hack into websites and financial accounts to wreak havoc, there are plenty of fraudsters out there who take a more low-tech approach to swindling whomever they can, including small business owners.

Protect yourself and your livelihood from being victimized by reading up on some of the most common schemes that are being perpetrated today. Here are several culled from an online search:

The Phony Yellow Pages

The AARP is warning about this scam and others that prey upon your company’s need to promote itself in a difficult economy. It reports that a scam recently busted by the Federal Trade Commission (FTC) involved authentic-looking faxes, complete with a “walking fingers” logo, that appeared to be from the local Yellow Pages directory. Businesses on the receiving end were instructed to return the form to pay for an $89 per month, two-year registration with an online directory. Those who complied were then billed by a shell company and instructed to send more than $1,000 to a Park Avenue address in New York. If they tried to cancel, they were then subjected to collection tactics that were described as “threatening and intimidating.”

Once prosecuted, the European-based scammers were ordered by a U.S. federal court to pay more than $10 million for tricking small businesses and nonprofit organizations into paying for the unwanted listings; additional sanctions were also imposed.

AARP advises that if you receive directory listing inquiries or invoices, take the time to look up your local phone directory’s number and call it (not the number listed on the notice or invoice) directly to confirm that it sent you the material.

Phishing Emails

Phishing is an attempt to acquire sensitive information such as user names, passwords, and credit card account details by masquerading as a trustworthy entity in an email. This warning comes from the Better Business Bureau (BBB), which notes that some phishing emails specifically target small business owners by hacking into their computer or office network.

“Common examples include emails pretending to be from the IRS claiming the company is being audited or phony emails from BBB saying your company has received a complaint,” it notes. “If you receive a suspicious email from a government agency or BBB, don’t click on any links or open any attachments. Contact the agency or BBB directly to confirm the legitimacy of the email.”

Fake Invoice

American Express recently noted on its Open Forum that an old and simple fraud targeting busy small business owners is making a comeback. Scammers send fake invoices to business owners for generic services like copier maintenance or telephone repair. They keep the amounts realistic enough in the hopes that the businesses will simply pay them without verifying if the bill is legit or not.

“The perpetrators play the odds and only need a small percentage of targets to fall for the fraud for them to make a profit,” the site says. “Business owners should be careful to ensure that all paid invoices are matched with purchase orders or at least reviewed by someone at the company before being paid.”

Advance Fee Schemes

This scenario involves a victim paying money to someone in anticipation of receiving something of greater value — such as a loan or contract — and then receives little or nothing in return. The FBI notes that the variety of advance fee schemes is limited only by the imagination of the con artists who offer them.

“They may involve the sale of products or services, the offering of investments, lottery winnings, ‘found money’ or many other ‘opportunities’,” it points out on its website, adding that some con artists offer to make financing arrangements if a business gross signs a contract and pays a finder’s fee in advance. “Victims often learn that they are ineligible for financing only after they have paid the ‘finder’ according to the contract. Such agreements may be legal unless it can be shown that the ‘finder’ never had the intention or the ability to provide financing for the victims.”

If you fall victim to a scam (or suspect that you have), file a complaint with the FTC’s Complaint Assistant, a database accessed by law enforcement agencies around the country, or contact your local FBI office.

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