The BBB consistently hears from thousands of small business owners with complaints of being subjected to a scam. Maybe they were involved in an invoicing scam or were misled into forking out cash for a product or service they didn’t want. But not all con artists just want money from your business; some are fishing for customer data and will use high-tech methods to get it.
Protect your business by becoming familiar with these small business scams:
1) Fraudulent invoicing scams. Scammers know that small businesses are used to dealing with plenty of vendors and suppliers — and they know that invoices come along with that territory. So, they create out a seemingly legitimate invoice in hopes you’ll pay it. Common fake invoice scams include invoices for office supplies and online directory listings. To avoid paying a fake invoice, keep stupendous records of all your purchases, vendors, and subscriptions.
2) Overpayment scams. If a purchaser gives you a check larger than the amount due and asks for a refund for the overage, it’s time to raise the red flag. These impostors employ the same tactic on credit cards too. In these types of small business scams, the check will bounce or the credit card will be stolen. The Federal Trade Commission offers great advice for avoiding fall prey to overpayment scams, which includes verifying the buyers contact information and never accepting payment for more than the product or service sold.
3) Phishing emails. Phishing emails aren’t reserved just for individuals. Would-be crooks also target small businesses with this tactic. The topic of the email can be anything from taxes to complaints about your company. But regardless of the nature of the email, the deceivers are trying to find a way to access confidential business information to your detriment.
4) Domain name scams. A common small business scam is to lure small business owners into paying for a domain name they don’t want or need. Here’s how it works: You receive an email from a domain registration center, stating that another business applied for a domain name that could result in an infringement on your trademark. This is just an unsolicited ploy to get you to send money for that domain name. So that you know what to look out for, FireTrust houses a long example list of domain name scams.
5) Prepaid shipping scam. Usually conducted over the phone, these scams involve a customer ordering a large, heavy item. The caller uses a credit card to pay for the item, which is approved. But the caller then asks if you will pre-pay to ship the item to a distance location or even a P.O. box. The scammer purposely orders a heavy item to rack up the shipping charges. Of course, you find out later that the credit card is stolen.
Whether its prepaid shipping requests or fake invoices, it’s critical for small business owners to stay one step ahead of con artists. To do so, be extra vigilant and cautious when dealing with email, phone, or fax orders and communication. Most importantly, trust your instinct. If it smells like a fish, it probably is.