Chances are, you have encountered at least one or two scams in the past. Unfortunately, small businesses have been a rising target for scams. This causes many small businesses to lose their time, money, and even their reputations are at risk, thanks to these scams. This is why small businesses need to be aware of scams and how to stop them before they become a big problem. Here are a few common scams small business owners need to be aware of:
1. Phishing emails
2. Fake invoices
3. Imposter scams
4. Business directory scams
5. Social media scams
6. Tech support scams
7. Loan and Grant Scams
8. Charity Request Scams
1. Phishing Emails
A phishing email appears to come from a legitimate source, such as one of your clients, a vendor, or even a government agency. Unfortunately, these emails are not legitimate, and often the sender includes a link, attachment, or other download that can then steal your personal information or your customers’ information. If this information is accessed, it can be detrimental to your online reputation.
These emails often look legitimate because they use real company logos and common business language. However, pay attention to the actual email address the sender uses. The name on the email may look legitimate, but often, the actual email address will not match the name.
Phishing emails often tend to use threatening language to get you to share information without thinking before sending. They will often use threats, such as suspending your accounts or other drastic measures. If you ever receive an email like this, be sure to confirm directly with the company. Don’t use the information in the email; instead, research the business, or use any established contact you may already have. That way, you know you are speaking to someone at the actual company and not further communicating with a scammer.
2. Fake Invoices
A scam involving fake invoices will typically target your accounts payable department. In this case, a scammer will send an invoice for services or merchandise you or your business never ordered. Much like phishing emails, these will look like legitimate invoices with realistic logos.
If these invoices are not carefully reviewed and matched to your records, they can easily slip through with other bills and get paid. If this happens, it can cost your business money and may lead to future fraud.
3. Imposter Scams
Another common scam to be aware of is an imposter scam. This is a scam when someone poses as either an employee at your company, a vetted supplier, or even a government employee. These people often ask for money transfers, confidential data, or gift card purchases. Typically, these requests come via email or phone calls, and because the requests seem legitimate, employees tend to comply without second thought.
If your business ever receives a request like this, make sure to speak directly to the person and confirm information and identity. Also, verify phone numbers and email addresses. If the person is claiming to be a government employee, reference their email and contact info through a government website or give their office a call.
4. Business Directory Scams
Sometimes, scammers might contact your business and ask you to update or confirm any information listed in an online directory. If you confirm details, you may actually be agreeing to payment or subscription without your knowledge. Soon after, your business will get a bill for services. If you call to complain, scammers will splice together a phone call that makes it sound like you or an employee agreed to a service or charge.
Before updating your info over the phone or email, be sure to vet the person or company. Ask directly if there is a charge or fee. Reputable directory companies usually give time to consider joining the directory before signing a contract or agreement.
5. Social Media Scams
There are also a few scams to be aware of involving social media. Hackers can access your accounts and steal your sensitive information, as well as any employee or customer data. They can also pose as your business and advertise false products, services, or run fake ads. All of these things can damage your reputation and are just one of the reasons it’s extremely important to secure your social media accounts.
6. Tech Support Scams
Sometimes, you might receive a call from someone claiming to be from a “tech company”, warning you that a virus or cyber threat has been detected in your business systems. They may also tell you that you need to update software systems.
Then, this person will offer to fix your issue remotely for a fee. However, not only will they not fix the supposed issue, but they may also steal customer information and other sensitive data. Malware may also be installed.
If you ever receive a call or email like this, run your own check for any software updates and look for any security alerts. You should also alert your own IT department if you have one. If you’re concerned that the scammers may have accessed any data even without you agreeing to any sort of services, be sure to contact a reputable cybersecurity firm.
7. Loan and Grant Scams
If someone tries to pull a loan or grant scam on your business, someone will claim to be from some sort of federal or local financial institution and offer a business owner a loan or a grant. They will request personal and financial information, as well as an advance payment to complete the process.
However, you should be suspicious of anyone offering a loan or a grant that you have not applied for. If you think the company or offer could be legit, make sure to reach out and verify any information before sending any payment.
8. Charity Request Scams
Another common scam small businesses should be aware of is a charity request scam. Scammers will pretend to be a representative from a legitimate organization and ask for donations. However, they may try to divert funds to their personal bank accounts. If you ever receive a phone call from a particular charity that feels suspicious, be sure to follow up with the actual charity itself to confirm details.
How to Protect Your Business Against Potential Scams
Thankfully, there are some things you can do that can help protect you and your small business from potential scams. Here’s how to protect your business against potential scams:
1. Verify all information.
2. Educate your employees on potential scams.
3. Use secure passwords and update systems.
1. Verify All Information
Many of these scams can be prevented by simply taking the time to verify information. If you get a call from someone claiming to be with a company with which you work regularly, try to verify that the employee actually works there.
Make sure their email matches the rest of the company, and they aren’t requesting payment through another channel. Also, contact the company independently to confirm this new contact is an employee and that the information they are providing is accurate, using the channels you know are verified and accurate for the company.
Be really careful with any payment procedures. Make sure that the accounts payable department goes over all requests and has an approval process in place for unexpected purchases. It’s also wise to avoid certain payment methods, such as gift cards or prepaid debit cards. Checks are also a great way to ensure a paper trail is established in case you need to go back and check on any information.
2. Educate Your Employees on Potential Scams
Another thing you can do to help protect your business from scams is to train your employees to notice and report suspicious behavior. Have a training session where you go over all potential scams and implement procedures for what to do if they happen.
Make sure your team knows exactly who to report specific scams to. For example, overpayment scams should be reported to your accounts payable department, and IT scams should be reported directly to the IT department. Make sure these departments have steps in place to handle these scams.
3. Use Secure Passwords and Update Systems
Make sure you are using very secure passwords and changing them either every 60 or 90 days, or more, depending on your business, industry, and situation. Two-factor authentication is also important, so enable that where possible. Be sure never to share passwords via email. While these are important procedures for small businesses to follow, they are also useful home office security tips.
Updating your systems is another great way to keep things secure and is an essential digital safety tip. Updated software can help protect your computers and software with the latest protection and security features.
These are just a few common scams small business owners need to be aware of. It’s important to be aware of these scams so you can protect your small business and your employees.