BBB Business Tips: Common Business Scams
Here are some of the most common business scams and advice on how you can avoid falling prey to them, brought to you by Better Business Bureau Serving Greater Cleveland.
Scams can impact every business, regardless of location, size or industry. With everything that businesses have had to face over the last few years, from COVID to supply chain issues, being scammed does not need to be on the list. Learn to identify common scams to help protect you, your team and your business.
Some of the most common business scams include:
Phishing scams. Phishing scams attempt to steal sensitive information about your business. These scams often appear to be legitimate emails or text messages. However, when you click on the link, you download a virus that captures personal information or loads a form that asks for bank account or credit card details. Be leery of unsolicited messages and don’t click on links. Instead, hover over the link with your cursor to see the real address.
Business Email Compromise (“BEC”). Business email compromise fraud is an email phishing scam that typically targets people who pay bills in businesses, government and nonprofit organizations. It has resulted in more losses than any other type of fraud in the U.S., according to the Federal Bureau of Investigations.
In BEC fraud, the scammer poses as a vendor, CEO, or other trusted source who sends an email to you or your employees. The email asks them to wire money, buy gift cards or send personal information, often for a plausible reason. If money is sent, it goes into an account controlled by the con artist.
Brand hijacking. Scammers often pretend to be legitimate companies to trick consumers. Scammers set up fake websites and “hijack” your company name and address. They may also misuse your company logos and website content in order to impersonate a business and deceive unsuspecting visitors. In this con, the legitimate company doesn’t necessarily lose money, but its reputation is on the line when angry customers who were ripped off by scammers think the real company is responsible.
Phony invoices. Businesses often receive fake invoices demanding payment for products or services they never ordered or received. This most commonly includes office supplies, websites, domain hosting services and directory listings. Often, if you read the fine print it identifies “the bill” as a solicitation.
Directory scams. Con artists attempt to fool businesses into paying for a listing or ad space in a non-existent directory. In some cases, the directory will technically exist, but won’t be distributed to potential customers. Scammers might even impersonate legitimate directories including Yellow Pages. Either way, the business is billed for listing.
Office supply scams. Businesses receive an unexpected telephone call from someone claiming to represent a reputable company with which the firm often does business. Sometimes scammers will even call in advance to find out what brand of supplies or equipment the business uses. The scam caller will try to sell the business surplus merchandise at a reduced price, citing a cancellation or over-order by another purchaser. The merchandise doesn’t exist. Don’t be fooled.
Vanity award scams. A vanity award scheme capitalizes on a company's excitement for an award that essentially holds no value. This con typically targets business owners through email campaigns. The scam email congratulates the owner on their selection for the award and invites them to click a link for further details on how to claim the prize. But of course, claiming the honor involves paying several hundred dollars. Always research the organization offering the “award.”
BBB offers the following tips to help businesses protect themselves from fraud:
● Train your employees. Keep your staff up to date on the latest scams and red flags. If your staff is involved in a workplace scam encourage them to come forward so your company can act swiftly and appropriately.
● Keep good records. Keep documentation of all orders and purchases. This will help you to detect bogus accounts and invoices.
● Be extra careful with payment procedures. Establish payment authorization procedures, including a multi-person approval process for transactions above a certain dollar threshold.
● Avoid some payment methods when possible. Wire transfers, pre-paid debit cards, cryptocurrencies and gift cards are scammers’ preferred methods of payment. Always confirm that any request for payment with untraceable methods such as these is verified by an authorized source.
● Double-check vendors. Make sure that the business billing you is a business you’re familiar with and normally do business with. If not, question it. Get the name of the person you speak with, the company name, address, phone, website, etc.
● Protect your devices. Make sure your devices are up to date with the proper computer protection software and a firewall. Don’t click on links inside unsolicited e-mails. They could spread malicious software or viruses.
● Have a plan. No one wants to get scammed, but what happens when you do? It is important to create a recovery plan in case your system gets compromised, you lose sensitive information, or lose money. Know what to do before it happens.
For additional tips and resources, visit BBB.org to help keep your small business thriving. Contact your Better Business Bureau by calling 216.241.7678 or emailing firstname.lastname@example.org. Interested in becoming BBB Accredited? Find out how you can apply for BBB Accreditation.