Be Vigilant. Stay on Top of Latest Business Scams.
As the owner of a business, you dedicate a great deal of your finite time and energy into making sure your organization runs effectively. Unfortunately, there are criminals in the world who may target your business with scams and hoaxes. As well as costing money and wasting time, scams can also damage your reputation. Here are some of the most common scams that you need to watch out for.
1. Fake invoice scams
Even small businesses can have a large number of invoices to process every day. Keeping track of every transaction can be a headache. Scammers are aware of this and will sometimes send out fake invoices for commonly used goods or services, such as raw materials or cleaning services. Make sure you and your staff are alert to this possibility and are ready to spot fake invoices before they are paid.
2. Credit card processing scams
Most businesses owners can be vulnerable to scammers who promise to reduce their operating costs. Credit card processing scams are just one example of this. The culprits offer deceptively low rates for credit card processing, often using vague terms like ‘wholesale processing’ or claiming to have negotiated special rates with credit card companies. Of course, no such rates are available in reality. The true price will be buried in the fine print of the contract you’ll be invited to sign. The actual rates will be significantly higher than those originally offered, often much higher than you would normally expect to pay. Once you’ve signed up with one of these providers, it can be hard to extricate yourself from the contract without significant penalties.
3. Equipment leasing scams
Equipment leasing can be a major drain on your finances. Scammers know this and may attempt to trick you with deceptively low prices on equipment leasing. Of course, once you’ve signed on the dotted line, you’ll realize that the helpful supplier has used fine print, confusing price structures and even outright untruths in order to get your money. As with credit card scams, it can be difficult to pull out of these contracts without a time-consuming (and expensive) legal fight.
4. Unordered products
The next step up from fake invoices, this scam involves deliveries of products or supplies that you didn’t order. A scammer will contact your business, claiming to offer free samples, catalogues, or promotional items. When you agree to receive these items, you may find yourself presented with a large delivery of goods that you did not order, along with a demand for payment. These goods will often be overpriced and your business may be subjected to high-pressure tactics in order to secure payment.
No matter what the scammer tries to tell you, you should stand your ground. If you really didn’t order the items, you do not have to pay. You’re within your rights to refuse payment and return any goods delivered to you without an order. In many jurisdictions, it’s completely legal for you to keep the products or materials without offering payment if you did not actually order them. This is not true everywhere, though, so check the legal situation in your area before you decide to keep the goods.
5. Advertising, listing and review scams
Visibility is the lifeblood of most businesses. Scammers will try to take advantage of this by offering fake or worthless advertising and listings. Some may pretend to be from the Yellow Pages or another legitimate organization. Others may claim to represent a completely fictitious publication or listing provider. Either way, they will charge a high fee for which your business will not see any additional advertising or publicity.
Review frauds are a little different. Here, scammers will leave or threaten to leave negative feedback on sites such as Yelp, or place bad reviews of your products on online marketplaces where your products are sold. They will demand money or free goods and services in exchange for not posting these reviews or for taking down existing bad feedback. It’s important that you don’t give in to these demands. You are in the right and the scammer is breaking the law. You can contact the platforms themselves to remove any fake reviews, and may have cause for legal action against the fraudster.
6. Impostor scams
Scammers often pretend that they’re contacting you from a utility company or government agency like the IRS in order to scare you into making a payment. You may receive a letter, phone call or email, ostensibly from an official representative, threatening dire consequences if a payment is not made. If they’re posing as a gas, electricity or water supplier, they may claim that you have an outstanding debt and threaten to cut off your power or water if you don’t make a large deposit right away. If they’re posing as a government agency, the payment will be for back taxes, licenses, registrations or similar fees.
In reality the debt doesn’t really exist. Any payment you make will go into the pockets of criminals. These scammers often demand payment in an unusual form — Bitcoins, prepaid debit cards or gift cards, for example. This is done to ensure that payments can’t be reversed and to help prevent law enforcement from tracking the payment when the scam is discovered. If you receive a call of this nature, ask the person contacting you for their name, title and phone number to call them back. If this is a scam, they will likely disconnect immediately or give you false information. Contact your utility company right away to let them know about the incident.
7. Digital scams (social engineering)
The online world is rife with scams and hoaxes. Most of these rely on some form of social engineering — using manipulation gaining your trust so that you let down your defenses. Phishing is one example of a digital scam.
A phishing attack begins with an email, ostensibly from a trusted source such as your bank, the postal service, an online shopping site like Amazon, or a payment processor such as PayPal or Venmo. The email will usually contain a link, apparently to the login page of the site in question, along with a message implying dire consequences if you don’t immediately access your account. When you click on the link, however, you’ll be taken to a fake site. Entering your details there will result in the scammer stealing your information and using it to access your account on the real site.
Most phishing scams use mass mailings with a generic message. A more advanced version of this scam, known as spear phishing, involves targeting specific individuals with carefully tailored messages that are much more convincing. Small business owners may be targeted due to their access to business bank accounts.
You can protect yourself against digital scams by being vigilant about security. Don’t follow links in emails and only enter your login information when you’re sure you’re on the real site. You should also avoid downloading attachments unless you are certain that the files are legitimate.
The Bottom Line
These are just a few of the most common scams you might encounter as a small business owner. New scams and variations on old ones crop up all the time so it’s important to stay up to date on current hazards. To find out more about the kinds of scams that might affect you and your business, contact your local chamber of commerce , Better Business Bureau, and the Federal Trade Commission. Business organizations in your area may also be able to give you advice.
About Universal Funding
Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days. Call us today for more information at 855.382.6153.