5 Small Business Scams To Be Aware Of

Scams can cost a small business big. They come via phone, letter, fax, and of course the famous emails from Africa telling you that you are now a multimillionaire. Modern scammers are much like their snake oil granddaddies, just the technology has changed.

It is important to be aware of what types are currently in use so you and your employees can avoid them. Here is a look at five that are popular this season.

#1. Directory Fraud

This one involves scammers trying to convince you to pay them a hefty fee to list your business contact information in one of the popular directories, or all of them. They might tell you they are calling to renew your listing, counting on the fact that it is hard to remember everything you’ve signed up for.

They often send invoices that are bogus, simply expecting the accounting department to pay it without researching the charge. In one form or another this scam has been around since the first Yellow Pages came out.

Always questions charges if you aren’t sure. Never pay until you have proof you signed up for it. And even if you get what seems to be proof, but you still aren’t sure, contact the Better Business Bureau and ask the company for more documentation.

#2. Overcharges and Overpayments

This happens when you get a check or money order in the mail with the word “overpayment” or “overcharges” written on it. Along with it, they will tell you to send a check or money order back to them with the refund.

Since you don’t owe the money in the first place, you will be giving them money that you never owed to anyone.

#3. Phishing

All too common in the day of the internet, this scam involves stealing your identity, then using your name or that of your business to scam others.

Phishing, using just an email link, usually has a scammer encouraging you to send him your private data, like your social security number, bank information or credit card numbers. Needless to say, never give out that kind of information online or over the phone.

#4. Using a URL

Another internet scam, this involves scammers sending letters to businesses, insisting that their domain name has expired. For a hefty fee, paid to the scammer, it can be renewed and reinstated.

If it happens to you, call your webhost immediately to find out if there is any truth to it. If there is, they can guide you through the process to solve the problem. Whatever you do, don’t send anyone money right away.

#5. Conning for Charity

As a small business, you are often asked to donate money and in-kind items. Scammers use this as an opening, representing a fake charity in the hopes you will donate to it. One helpful place to check is the Federal Trade Commission’s “Before Giving to a Charity page.

For a full listing of scams, check out Small Business Scams. To stay safe, be sure to carry ample general liability and cyber liability insurance.