Small Biz Scams: A Real Growth Industry

Protect Yourself Against ScamsI can’t tell you if the S&P 500 will be up a year from now, but I can tell you that scams targeting small businesses will have increased. My hope is that our awareness and vigilance increase even more. With that aim in mind, let’s look at one scam that’s making the rounds right now and then share a few tips.

School’s out and they’re out to get you!

As schools are winding down, businesses are receiving phone calls from scammers posing as a local school employee. This person says that the school has lost purchasing account information and persuades the business to share the account information over the phone.

Later, someone calls the business back and places an order “for the school.” Often the scammer directs the business to ship the order to a third party address. However, sometimes the scammer has the order shipped to the school. That adds one more step to the scam—the bad guy has to contact the school pretending to be the vendor and say that the business has wrongly shipped an order to the school and have them forward it to the correct address.

Whenever you receive an inquiry like this, before you start to give out information, hang up and call back the number you have on file for the account. Also, in the same way, independently verify large orders.

A bull market for scams

Small businesses can be especially vulnerable to these kinds of scams. Another one that’s hitting entrepreneurs is the advance fee loan scam. With loans being hard to obtain, it’s easy to see why owners would take this bait. It’s a simple scheme: A loan “broker” takes an upfront fee with the promise of finding a loan for the business owner. The loan, of course, never materializes.

Complaints to the FTC about this specific scam jumped from 43,000 in 2012 to 53,000 in 2013, according to Giving small business “the business” is booming.

Awareness and training

Fortunately, there are a lot of online resources to help business owners stay one step ahead of the scammers. The federal government regularly updates a page on small business scams. Bookmark it and check it at least once a month. It will keep your senses sharp for anything fishy that comes down the pike. Share the information with your staff.

And speaking of fish, make sure you and all your employees can smell a phishing email from a mile away. Usually these are emails that look like they come from an important source—like a bank or an e-commerce site—and urge you to take fast action to change a password or confirm something, otherwise your account will be deactivated.

Identify the phish

You and your employees need to know how to tell where questionable emails really come from. They might say Bank of America Customer Service, but when you find the real sender it will be some obscure email address. However, the words “bank-of-america” might be buried inside the email address somewhere, giving it a faint scent of authenticity.

Some email software will reveal the true address by hovering over the sender’s “name.” Sometimes you need to look in the email header. Checkout this article on TechRepublic for more information.

Finally, as I mentioned above, train your employees to recognize scams, and don’t have a “once and done” attitude. Touch on the subject at department meetings on a regular basis. Keep employees up to date, and when you experience a wannabe scammer, share all the details throughout your business.