Scam Alert: Know how to Protect your Business
July 21, 2023
| BusinessFocus-Business Focus
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 It is amazing to think 2023 is half over! Time really goes fast, and from
day-to-day things move even faster in your business. One thing that can
slow your business down and potenally cost you money is fraud. There
are many types of scams that target small businesses. This month, we share
a few examples of these with a link to several more examples and what can
be done to protect your business from scammers.
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Top 10 Scams Targeting Small Businesses
By: Lee Potts, Vice President/Senior Credit Officer
Recently, the Better Business Bureau (BBB) published an informative article describing various types of scams that target small businesses. A few of these examples are shown below as excerpts from the BBB’s article. The three examples that follow are those that tend to hit too close to home and are examples we have seen in our area.
Phishing scams.
Phishing scams attempt to steal sensitive information about your business. These scams often appear to be legitimate emails or text messages. However, when you click on the link, you download a virus that captures personal information or loads a form that asks for bank account or credit card details. Be leery of unsolicited messages, and don’t click on links.
Overpayment scams.
In this scam, the person you are doing business with sends you a check for more than the amount they owe you. Then, they instruct you to wire the balance back to them. Or, they send a check and tell you to deposit it, keep part of the amount for your compensation, and then wire the rest back. The results are the same: the check eventually bounces, and you’re stuck, responsible for the full amount, including what you wired to the scammer.
Stolen identity.
Scammers often pretend to be legitimate companies to trick consumers. Scammers set up fake websites and “hijack” your company name and address. They may also use brand hijacking - blatant copying and misusing company logos and website content - to impersonate a business and deceive unsuspecting visitors. In this con, the company doesn’t necessarily lose money. However, their reputation is tarnished.
Scanning the following QR Code will take you to the full article to view the remaining seven scam examples. There will also be a list of seven things small business owners can do to protect against these scams in that article. Go check out the full article for a lot more information!
Charity pitches.
Most businesses are regularly asked to donate funds to charitable causes. While many requests are legitimate, small businesses become victims of fraudulent or deceptive charitable solicitation schemes every year.
Phishing scams.
Phishing scams attempt to steal sensitive information about your business. These scams often appear to be legitimate emails or text messages. However, when you click on the link, you download a virus that captures personal information or loads a form that asks for bank account or credit card details. Be leery of unsolicited messages, and don’t click on links. Instead, hover over the link with your cursor to see the real address. Also, be sure your computer has the proper firewall and computer protection software.
Office supply scams.
Businesses receive an unexpected telephone call from someone claiming to represent a reputable company with which the firm often does business. Sometimes scammers will even call in advance to find out what brand of supplies or equipment the business uses. The scam caller will try to sell the business surplus merchandise at a reduced price, citing a cancellation or over-order by another purchaser. The merchandise doesn’t exist. Don’t be fooled.
Coupon books.
Small business operators are often approached to participate in coupon book promotions. The business offers discounts or extras in coupon books that promoters sell to consumers. Problems occur if the promoters change the terms of the coupons, oversell the books, or distribute them outside the company’s normal business area. Ensure the coupon book is promoted by someone you trust and the terms and conditions are spelled out.
Vanity award scams.
A vanity award scheme capitalizes on a company's excitement for an award that essentially holds no value. This con typically targets business owners through email campaigns. The scam email congratulates the owner on their selection for the award and invites them to click a link for further details on how to claim the prize. But of course, claiming the honor involves paying a several-hundred-dollar fee. Always research the organization offering the “award.”
Overpayment scams.
In this scam, the person you are doing business with sends you a check for more than the amount they owe you. Then, they instruct you to wire the balance back to them. Or, they send a check and tell you to deposit it, keep part of the amount for your compensation, and then wire the rest back. The results are the same: the check eventually bounces, and you’re stuck, responsible for the full amount, including what you wired to the scammer.
Tips to avoid small business scams
BBB offers these tips to help small businesses protect themselves:
- Keep good records. Keep documentation of all orders and purchases. This will help you to detect bogus accounts and invoices.
- Be extra careful with payment procedures. Establish payment authorization procedures, including a multi-person approval process for transactions above a certain dollar threshold.
- Avoid some payment methods when possible. Wire transfers, pre-paid debit cards, and gift cards are scammers’ preferred payment methods. Always confirm that an authorized source verifies any requests for payment with untraceable methods such as these. Also, try to pay by a written company. That way, a paper trail has been created.
- Double-check vendors. Make sure that the business billing you is a business you’re familiar with and normally do business with. If not, question it. Get the name of the person you speak with, the company name, address, phone and website.
- Be careful what information you share. Do not give out information about your business unless you know what the information will be used for. Never provide personal information or financial details to anyone you don’t know.
- Protect your devices. Make sure you have proper computer protection software and a firewall. Don’t click on links inside unsolicited e-mails. They could spread malicious software or viruses.
- Spread the word. If your employees know about the scam, they’ll be more likely to spot it. Tell your colleagues, too.
Bonus:
This example is not mentioned in the article but has happened in our area. Sometimes email accounts can get hacked by scammers and they will send messages to people on the account owner’s list. The emails are written to sound like the account owner, but they may contain comments such as this example: “Please only reply to this email, and don’t call me as I have someone else with me.” Such a comment may sound out of the ordinary, especially if it is someone you know. Never hesitate to call the person with the number you already have on record to verify! If something in an email purportedly from someone you know seems off, there is a chance it may be!
As always, if you have further questions, do not hesitate to reach out to our lending team!