How can I protect my small business from scams?
Scams directed at small businesses are growing, posing a significant risk to small businesses. In fact, small business scams can result in a higher monetary loss than those targeting consumers.
Based on survey data from BBB’s “Scams and Your Small Business Research Report,” approximately six percent of small businesses lose money to scams every year with an average of $4,373 per harmed business and a total loss estimated to be more than $7 billion a year. To protect your business from scammers, BBB suggests familiarizing yourself and your employees of common scams.
To help with that, here are the top 5 riskiest small business scams:
Bank/Credit Card Company Imposter This scam typically involves impersonation of a bank or other credit card issuer. Under the guise of verifying account information, con artists try to fool their targets into sharing credit card or banking information.
Directory Listing and Advertising This scam tricks businesses into paying for non-existent advertising or a listing in a non-existent directory or “Yellow Pages.” In some cases, the directory will technically exist, but will not be widely distributed.
Fake Invoice/ Supplier Bill Scammers prey on business owners and hope they won’t notice a bill, often for office supplies that the company never ordered. In other cases, scammers send urgent notices for renewal of website domain hosting or other critical services, hoping businesses will pay without proper due diligence.
Fake Check These scammers ask the company to deposit a check and wire some of the money to a third-party. The scammers often tell the business they need them to cover taxes or fees or purchase supplies. By the time the bank discovers the business has deposited the check, the scammer already has the money.
Tech Support Scammers start with a call or an alarming pop-up message claiming to be from a well-known company. They may ask the employee to pay them to fix a problem they don’t really have or enroll the business in a non-existent or useless computer maintenance program.
Be proactive and protect your business by taking preventative measures. Start by training your employees. Educate them on common scams and how to spot red flags. It’s important to have processes in place to accurately verify invoices and payments. Make sure your staff checks invoices closely before paying it.
Nowadays it’s easy for scammers to create a fake caller ID, legitimate-looking website or email. Be wary of email attachments and phone calls. Encourage employees to change their passwords and secure financial information. Finally, before doing business with a new company, read what others are saying about the company. Research on bbb.org to check their Business Profile.
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