Small businesses can be an easy target for scammers who are employing various and more advanced schemes to rip them off—unless business owners have the tools in place to outsmart their cheating.
As technology advances, scammers are using it their advantage to come up with new, harder-to-detect methods and approaches of swindling money and resources out of businesses. They’re cashing in on the fact owners and employees often are too busy to ask questions or investigate further.
Each year, scammers swindle small businesses out of approximately $250 million posing as telemarketers of office supplies, according to the Senate Committee on Small Business. And according to the Association of Certified Fraud Examiners, small businesses experience a fraud rate of nearly 32 percent.
These numbers are disturbing, but businesses, whether large or small, can take steps to protect themselves from scammers. They can learn what is out there and create plans of defense, making sure their employees know what to do in any situation that arises.
The BBB serving Northern Colorado and Southern Wyoming compiled a checklist of the latest scams hitting businesses. The list includes:
- Phishing: Scammers phish to steal information off a computer for ransom or to sell it on the black market, sending emails verifying personal information or requiring an IRS audit that appear to be from a legitimate sender. They actually are fraudulent messages that when opened or links are clicked download viruses into the victim’s computer. The viruses capture business and personal information, such as the bank and credit card accounts and employees’ Social Security numbers. Businesses can protect themselves by making sure their firewalls and anti-virus software are up to date, encrypting sensitive information, using strong passwords and backing up files.
- Identity Theft: Scammers hack computer systems or pose as officials via the phone or email to get identity information, seeking the names and job titles of employees to use for fraudulent activity. Businesses can implement the firewalls and strong password policies, refuse to respond to information requests from unknown callers and limit who can access the business’s computer systems.
- Office Supply Scams: The scammer posing as a business’s regular supplier will call or email about a reorder and, if staff is tricked into agreeing, deliver overpriced merchandise, or send merchandise that wasn’t ordered and harass staff for nonpayment. Businesses can set up ordering processes requiring a purchase order and signature and keep accurate accounts payable records to confirm suppliers and past purchase orders.
- Directory Scams: The scammer calls or emails to update company information for an online or printed directory, indirectly seeking approval to send a bill for the listing or ad placement, which actually may not exist. Make sure the directory exists and that the listing and ads are legitimate.
- Vanity Awards: The scammer informs the business it has won an award or has been selected to be in a “prestigious” publication, but there are expenses involved for printing costs or copy orders. Make sure the organization offering the honor is legitimate.
- False Invoices: The scammer sends a fake invoice hoping it won’t be noticed among other monthly bills. The invoice, such as for advertising that hasn’t run or a supply order that won’t be delivered, may imitate the name of the business’s regular suppliers. Make sure employees who handle the invoices follow company procedures and question bills with questionable names and addresses.
The BBB encourages small businesses and their employees to be aware of longstanding scams to those on the cutting edge of technology. If businesses encounter a scam, they are encouraged to report it at the BBB Scam Tracker (bbb.org/scamtracker).
Start with Trust® For more tips and information, visit bbb.org.
Pam King is president/CEO of BBB Serving Northern Colorado and Wyoming