7 Scams your Small Business must Avoid and How

Scammers are everywhere and are thoroughly equipped with cutting-edge technology to strike individuals and businesses. A small business owner might believe that scams are only targeted at more prominent organizations in order to get the maximum money out of them. On the contrary, small businesses are easy targets for scammers. 

This is because a small business does not have access to high-profile security programs, are more inclined to open suspicious emails, or even engage in questionable calls in the hope of a potential client. The best protection against scams is to learn about your weaknesses and familiarize your employees with common scams to combat them.

Fake Invoices

Think of how many vendors you work with and how many bills you have to handle daily as a small business owner. A scammer might slip in a doctored invoice with the hundreds of other bills you receive. They often orchestrate doctored bills for office supplies they never delivered or even some subscription fees. 

For example, if you own a business of flags and banner ads and receive an invoice for acrylic paints, PVC materials, etc. You will most likely clear those dues before even investigating the invoices. Scammers often use the names of genuine vendors you deal with but change the payment address and other details on the bills to redirect the payment to their accounts. 

Phishing Scams

You might receive messages or emails asking for sensitive information like passwords or bank details, and these emails come from sources that seem to be legitimate. For instance, you might get an email asking for a password update, and when you click on the link and fill out the details, you’ll be handing over your sensitive data to the hackers.

Some emails also come with attachments that are corrupted. Once you download the attachment, all the data and files on your computer can be stolen by the scammers. Then they can misuse all of your sensitive data, such as passwords and credit card information.

Utility Service Scams

Every business avails several utility services like electricity, internet, gas, and water. These scammers will use this to extort money from you. They will call you and say that there are long overdue bills, which will lead to severance of the service if not immediately paid. As a small business owner, you can’t afford to lose even one hour of productivity. They create such a sense of urgency that you are often forced to pay the money out of panic, only to realize later that you have been fooled.

Fake Government Agents

Scammers pretend to be government agents and send letters, emails, and notifications to small businesses claiming that their trading license, business license, or registration certificates will be revoked if they don’t pay the taxes or fees. Under their pressure, any logical reasoning is lost and people are compelled to pay taxes for non-existent licenses and registrations. 

Tech Scams

With upgrades in technology, scammers are also getting smarter. They send emails and claim that the company’s cyber security is weak or that the systems are infected. They will send emails with corrupt files, which once you access, will give them total control over your systems. They will be able to get hold of all sensitive data like your customer details, bank details, and passwords.

If they get ahold of your net banking credentials, they can easily bleed you dry with no means of recovery. The scammers might even trick you into purchasing some non–existent computer maintenance programs. A common example is antivirus software and will charge you exorbitantly for these “services.”

Directory Listing Scams

Directory scams are common, where scammers will call you and ask for your company details to be published in some online directory or physically published magazines. Unfortunately, what might seem like an opportunity for free advertisement from their sugar-coated words will soon become a nightmare!

They will send you hefty bills for those fake directory listings. They will even resort to blackmailing you with recordings of the call where you handed over your details to them, accepting their proposal of listing your business on their directory.

Fake Checks

Scammers are deceptive. They play innocent to gain favors from business owners. They will overpay via checks and then ask you to repay that extra money immediately through gift cards or might even request you to send it to a third-party account. You’ll be gulled by their convincing stories and wire the money. Once you deposit the check, it will bounce and you won’t be able to do anything about it. 

How Can You Protect Your Business Against Scammers?

Train your employees on standard modes of scams to detect them and not fall into their trap. You must also encourage your employees to share any instance of fraud, since scammers tend to trick multiple employees from the same company. Use multi-factor authentication as a login for your employees, implement legitimate antivirus programs that can act as barriers against any malware, and train your employees to not open attachments from unknown sources.

Authorize a limited number of people with access to placing orders and paying bills. There also needs to be a system to track every order placed, undertaken subscriptions, utility services, etc. You can match the bills against each category before paying. Any change in contact info, payment method, or invoice bank details must be treated as a red flag and investigated. 

Conclusion

As a small business owner, you will encounter scammers at some point in time. Therefore, it is essential to spread awareness of the types of scams happening in your field so that everyone can keep an eye open for con artists. Scammers feed on impatience, urgency, fear, and panic. Therefore, calmness and logical reasoning can be your biggest weapons against their sly tactics.