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9 Common Scams Targeted at Small Businesses

Everyone needs to be cautious about potential scams… unfortunately, scammers are always finding new ways to exploit businesses and individuals. There are often warnings about scammers that target individuals and families, especially senior citizens. But, there isn’t a lot of conversation about scams that target business owners. Just because it isn’t often discussed, doesn’t mean that your business isn’t at risk of being scammed.

In fact, business accounting scams are becoming more common. Not only are these scams annoying, but they could be threatening the financial security of your company. If you fall into a trap that is set by a scammer, then you will not only lose out on the money. But, it is likely that you will need to dedicate many hours of time to clean up the mess.

Be careful about the management of your company so that you can avoid these potential issues! The best solution is to learn the strategies that need to be used to protect your company. Proactive management of your business is the best solution so that you can avoid some of the most common scams in the industry.

Here are a few common scams that you might encounter and tips to avoid them:

1. Fake Invoices

Truckloads of paperwork can move through the office each month, making it simple to slip in an extra invoice that seems unassuming and harmless. There are scammers out there who send invoices to local companies, with the hope that the invoice will be paid without any questions.

If the business owner is too busy to review the details of every invoice, then it is possible that a check will be sent for the fake invoice. These invoices might show line items for equipment or office supplies or services that are related to your industry. Sometimes, these fake invoices are requesting money for annual renewal or membership.

Avoid this issue by hiring an experienced accounting team to oversee the invoices and payments. Your accountant will watch for potential issues that might indicate the risk of a fake invoice. Good accounting services is an important step to protect your company.

2. False IRS Inquiry

Whether you receive a phone call or email from the IRS, a red flag should go up that something is not right. Usually, these inquiries are threatening and time-sensitive, making people think that they are being audited or in trouble from the IRS.

If the IRS needs to contact you, then they will always send an official letter in the mail. Any time there is a question about communication from the IRS, the best thing that you can do is talk to your accountant for assistance.

Your accounting team will be able to tell if it is a scam or if action needs to be taken with the IRS. In most situations, the request is coming from a scammer who is trying to get access to your personal information. Never send details such as bank account information or your social security number.

3. Robotic Phone Calls

How often do you receive a phone call with a recorded message on the other line? Robocalls are increasing in frequency, and these machines can even leave a message if you don’t answer the phone.

Often, the system finds your business phone number online. Then, you receive automated calls in an attempt to gather information or trick you into sending money. These autodialers are cheap and easy to use, making it nearly impossible to avoid the calls. Most individuals and businesses receive these spam calls on a regular basis.

4. Online Marketing or Directory Placement Scams

Business owners know that they need to create an online presence for their company, which is why so many people fall into traps of paying for fake services or over-inflated prices for marketing. For example, a scammer might contact your company and offer a service that is designed to update your business information in online directories.

Even if the business owner doesn’t agree to the services, the conversation might be recorded. Then, the company will be billed for services that they didn’t agree to. The phone call records can be doctored and used as “evidence,” with a threat from the scammer that they will take legal action if they don’t receive the payment. More often than not, the victim company will send the payment to avoid legal problems.

5. Customer Complaint Letters

One recent scam preys on a business owner’s fear of a bad online reputation. Fake emails are sent impersonating the Better Business Bureau. The letter claims that a customer complaint has been filed and the business owner needs to take action to protect their reputation.

Even though the email might seem legitimate, clicking on the link can lead to a download of malware. If the scammer can get access to your computer, then it means that they are trying to find sensitive information such as bank accounts or customer details.

6. Overpayments from a Customer

With this form of fraud, the scammer shows interest in high-ticket products or services that you are selling. The person requests to send a check for payment, intentionally writing the check for an amount that is higher than the price of the product.

Then, the scammer will request a wire transfer to refund the payment difference. The business owner will send a direct deposit or wire transfer. But, the check will bounce later, resulting in a loss of the money that was wired.

If you encounter this situation, then it is best to hold onto the product and request a new payment from the customer for the amount that is due. Also, be sure that you are cautious in gathering as much information as possible when processing digital transactions: full name, telephone number, address, etc.

7. Business Opportunity Scams

Whether someone approaches you with a pyramid scheme or they are offering a “blue sky” opportunity, it is possible that the scammer is trying to take advantage of your entrepreneurial mindset. Too often, business owners are approached by other people, even friends and family, offering a money-making service or investment opportunities. The person tries to convince you to spend money to join the program, but the promised results never come through.

Usually, these business opportunities are packaged in quick-start systems. If something seems too good to be true, then it probably is something that you should avoid.

8. Time Sensitive Emails

Everyone knows that it is a scam if they get an email from a Nigerian prince who wants to send money. But, did you know that other time-sensitive emails could be potentially dangerous to your company? If a scammer gets access to your email address, then they could send business requests or fake inquiries.

The email could be as simple as an offer to help with search engine rankings, or as complex as a proposal for a business opportunity. The goal of the scammer is to gain more information about you or your company that can be exploited or sold for money.

Any time you receive an email from someone that you don’t know, use caution about what you do with the email. Never, ever click on the link provided in the email or open any attachments. If you suspect that the email might be legitimate, then it is best to research the company through search engine inquiries rather than clicking on the provided links.

Even if the link in the email looks legit, it is possible that the scammer could use the click as a way to access your email account. Or, you might be following a seemingly harmless link to a page that places a virus or malware on your computer or phone.

9. Unusual Emails from Friends or Business Associates

While we are on the subject of email scamming, it is important to note that you could receive a scam email from someone that you know. If their account is hacked or they accidentally had malware downloaded on their computer, then it is possible that their email account could be used to send spam messages to your email account.

Often, the email will seem harmless, with a subject line that sounds personal. For example, the email subject line might say “What do you think about this idea?” or “You might like this.” Don’t click on the link in the email! Most likely, it will lead to the risk of your identity being stolen or adware that is downloaded on your computer.

When you receive an email from someone that you know, compare the subject line and content with communication that you’ve received in the past from that person. If anything seems unusual or different, then use caution before clicking on the link. It might be worth a phone call to ensure that the email came from a legitimate source.

Protecting Your Business

As a business owner, you need to enlist the help of industry professionals who can reduce the risk for your business. A good accounting team can help you avoid some of the common scams that target small businesses. If you need a reputable accounting and bookkeeping service, then you need to talk to us at Easier Accounting. We are here to help: (888) 620-0770