Being vigilant against fraud is not only important for a company’s bottom line, it also strengthens customer trust in the business. Becoming a victim of fraud can have a negative financial and reputational impact on a business and the Better Business Bureau recommends owners train their staff to look out for seven common scams that prey on small companies.
Every year the BBB receives thousands of complaints from small business owners who fell for an invoicing scam or were misled into paying for products and services they didn’t want. Scammers aren’t always trying to steal money from a business; sometimes they are after a company’s financial or customer data and will use many kinds of high and low-tech methods for getting it.
“Small business fraud can come from internal threats, such as employee fraud, or from external full-time scammers,” said Pam King, president/CEO of the BBB serving Northern Colorado and Wyoming. “Because small business owners often lack the time and resources to fight fraud, they are a popular mark for any number of different scams.”
The BBB warns business owners to look out for the following seven scams that target small companies:
Directory Scams – A perennial problem that has plagued businesses for decades involves deceptive sales for directories. The scammer will call the business claiming they want to update the company’s entry in an online directory or the scammer might lie about being with the Yellow Pages. The business is later billed hundreds of dollars for listing services they didn’t agree to or for ads they thought would be in the Yellow Pages.
Office Supply Scams – Some scammers prey on small business owners hoping they won’t notice a bill for office supplies such as toner or paper that the company never ordered.
Overpayment Scams – Be extremely cautious if a customer overpays using a check or credit card and then asks you to wire the extra money back to them or to a third party. Overpayment scams target any number of different companies including catering businesses, manufacturers, wholesalers and even sellers on sites such as eBay, Craigslist and Etsy.
Data Breaches – No matter how vigilant your company is, a data breach can still happen. Whether it’s the result of hackers, negligence or a disgruntled employee, a data breach can have a severe impact on the level of trust customers have in your business. Learn how to defend your company from a data breach for free with BBB’s Data Security – Made Simpler at www.bbb.org/data-security.
Vanity Awards – While it’s flattering to be recognized for your hard work, some awards are money-making schemes and have no actual merit. If you are approached about receiving a business or leadership award, research the opportunity carefully and be wary if you’re asked to pay money.
Stolen Identity – Scammers often pretend to be a legitimate company for the purposes of ripping off consumers. When it comes to stolen identity, the company doesn’t necessarily lose money, but its reputation is potentially tarnished as angry customers who were ripped off by the scammers think the real company is responsible.
Phishing E-mails – Some phishing e-mails target small business owners with the goal of hacking into their computers or networks. Common examples include e-mails pretending to be from the IRS claiming the company is being audited or phony e-mails from the BBB saying the company has received a complaint. If you receive a suspicious e-mail from a government agency or the BBB, don’t click on any links or open any attachments. Contact the agency or the BBB directly to confirm the legitimacy of the e-mail.
For more advice on how to manage your business effectively, visit www.bbb.org/us/Business-Resources/.
About the BBB
The Better Business Bureau, founded in 1912, is a champion for ethics and trust in the marketplace. Only businesses that meet the high BBB standards are invited to become BBB Accredited Businesses. Today, 123 BBBs across the United States and Canada rate more than 4 million local and national businesses and charities with scores ranging from A+ to F. Only a BBB Accredited Business may elect to participate in BBBOnLine, one of the most trusted and recognized Internet seal programs in the world. The BBB serving northern Colorado and Wyoming topped 1.1 million instances of service to consumers and businesses in the last 12 months. These services include reliability reports on local companies and charities, access to companies that can be trusted by industry, help with dispute resolution, and trustworthy information on consumer and business topics. Luanne Kadlub, BBB media relations manager, 970-488-2044 [email protected]
Find out more about the Manitoba Better Business Bureau here.