Deceptive operations that seek to defraud valuables or money, scams usually target individuals. But there are also a variety of scams targeting businesses. Scams targeting small businesses can affect companies of all sizes, and victims can suffer minor or significant losses.
A company’s danger of getting scammed can be reduced if the business recognizes its weaknesses and knows how a scam works. Scammers will intentionally employ deceptive sales strategies to lead companies to give them money. Phishing, invoice fraud, office supply scams, insurance fraud, and bank account takeover are all common types of scams targeting businesses.- Scams Targeting Small Businesses
Most of the time, scammers use similar strategies across the board when it comes to the forms of scams they use and the types of victims they target. If a company knows fraudsters’ tactics and is aware of the most frequent forms of business scams, it can reduce the chances of falling victim to one.
Further, it should be mentioned that scammers are con artists who notoriously operate by tracking down companies everywhere, this way making any prospective enforcement action quite difficult. Ideally, organizations and businesses should be able to prevent these frauds before they occur.
This article teaches you about the ten most common scams targeted at businesses so that you know how to protect your company.
Read further to find out what these scams are to protect yourself or make it easier for detectives to identify those who wronged your business.
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Scammers come up with all sorts of fake invoices for services or products that your company uses, such as cleaning or office supplies, and sometimes website domain names. They expect the person paying your business’s bills will mistakenly believe these invoices have arrived for products that the company purchased.
Scammers are aware that when an invoice for something important has arrived, such as an invoice for keeping a company’s website running, you would very likely pay first, asking any questions about the payment later. In fact, it’s all a ruse, so if you decide to pay fast, your money might be stolen.
Some of these issues may be avoided by using online banking or accounting software that shows suppliers’ details such as their names and their addresses. Before anything, ensure that personnel processing to send fax invoices follows the right protocols and questions bills without adequate backing.
Phishing emails look to come from a reputable source, but they’re meant to steal sensitive information such as bank account numbers, credit card details, and passwords. You can get a message that appears to be from the bank you work with, stating that you have your online bank account hacked.
Also, you might receive a message supposedly sent by the tax office claiming that your business is being audited. When clicking on any such link sent to you via email, you will be sent to a new website that’s an identical replica of the actual site, where you will be asked to provide the information that the scammer wants to steal from you.
Ensure your antivirus software and firewall are updated. Instead of opening email attachments or clicking links from emails requesting private information, contact the sender by calling the phone number you’re sure of being genuine and check the email’s veracity.
Insurance Fraud- Scams Targeting Small Businesses
Some scammers are specialized in saying they have slipped and fallen at your workplace and suffered injuries that are not visible on x-rays. Others will follow cars with your company name on them, hoping to work their brakes, and then fake an accident with them to claim they got injuries from the accident they have themselves caused.
Insurance fraud may follow your workers on the road, too. The “swoop and squat” is well-known. Your corporate vehicle is targeted by two crooks in two automobiles. The first vehicle darts in front of your vehicle, whereas the second follows closely. The first automobile then hits brakes, and your car rear-ends it, which then causes the car from behind you to rear-end your car.
To defend yourself from such scams, ensure you have enough insurance coverage. Moreover, it would be a good idea to invest in a few security cameras for your business headquarters and your corporate cars.
Office Supply Fraud
The scammers contact or email you for this ruse, saying they’re your regular supplier, reminding you that you should re-order what they are selling. The most common products for this scam are paper and copier toner. After, you get an order of costly products if you’re duped into accepting.
Or someone calls to verify an address, confirm a current purchase of products and office supplies, or provide a free brochure or sample. If you accept, you’ll be surprised when a product appears at your office’s doorstep, along with high-pressure requests to make payments for it. If you don’t agree to pay, the fraudster may play an audio file of a previous call as “evidence” that you have made an order.
Ensure your employees know this ruse and implement ordering processes that need purchase orders with signatures. A similar scam with the one just mentioned involves mailing you stuff you didn’t purchase and then nagging you for not paying.
Bank Account Takeover
Michael Benardo, the Chief of the FDIC’s Cyber-Fraud and Financial Crimes Section in the US, says the most prevalent and hazardous small businesses scams happen to be account takeovers. Scammers might be able to gain the login details of online banking accounts and subsequently make money withdrawals by sending phony emails and using false websites to distribute dangerous software like, for example, keystroke loggers.
Aside from exercising care online, keep an eye on your company’s bank accounts regularly to ensure that no illicit electronic transactions have been done. Inquire about any anti-fraud warnings that your bank provides.
Fake Services “Billing”
Scammers understand small companies rely on energy, phone services, and internet access to function. They may contact you, stating that a very important service bill has to be paid ASAP and threatening to turn off the power or cut off your phone service if payment is not made right away. They’re betting that you’ll be so worried that you won’t hesitate to agree to pay your “bill” while on the phone with them, using a credit or debit card.
Before disconnecting your service, legitimate service providers will always send you written notifications with many payment options. To check whether you have an account issue, call your service provider. Their number is always shown on the most recent bill.
During the week, most workplaces get many visitors, including postal carriers, repairmen, delivery people, salespeople, and solicitors. You could be at risk of theft if someone who works for you doesn’t screen guests at your business’s building entrance. Your copier may be wheeled out in a van parked in the back by that “repairman” who claims it must be replaced with a new model. Some thieving gangs dispatch people to distribute leaflets just to gain access to the premises, inspect what could be worth taking and test the security system you have installed.
If there’s a check-in counter where people are entering the building where your business is, make sure your personnel are aware of these tactics and don’t hesitate to question guests that they don’t know who they are.
Some other common scams for small businesses are:
- Directory scams, where the fraudsters claim they need your business info to update it in an offline or online directory
- Vanity awards, which is when the scammers lie about being a famous publication asking that you spend money for them to advertise your business
- Valuation fraud is when a “business broker” may send a fax or email to a firm’s owner, proposing to locate someone interested in buying the company. If you fall for the con, then you will get sent someone with a proposal, and you will have to pay a big valuation deposit, but that’ll be the last you will hear from them.
If you do not want to fall victim to a scam, it is essential to understand the main scam techniques we’ve covered above. Of course, don’t forget to remain vigilant and invest in anti-fraud software or contact specialists such as known Sauron Detectives or any other organization that suits you for its services to ensure you have security protocols in place. This way, you will be considerably safer against scammers.