BBB Small Business Tips: Be On the Lookout for Small Business Scams
Consumers aren’t the only victims of fraud. Every year, thousands of small businesses are targets of fraudulent or deceptive sales practices. Protect your business from scams by being aware of the red flags. Often, it’s only a matter of identifying suspicious situations and asking the right questions.
The Better Business Bureau urges small business owners/managers to be aware of these common business scams:
- Directory Scams – A perennial problem that has plagued businesses for decades invoves deceptive sales for directories. Commonly the scammer will call the business claiming they just want to update the company’s entry in an online directory or 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 which they thought would be in the Yellow Pages.
Phishing E-mails – Some phishing e-mails specifically target small business ownerswith the goal of hacking into their computer or network. 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
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 and wholesalers.
Vanity Awards – While it’s flattering to be recognized for your hard work, some awards are just 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.
Business opportunities. Many small business owners are approached to invest in other business opportunities. Promoters may even claim that the venture will increase customer traffic flow into the current business or that little effort is required to collect high profits. Before jumping into a business collaboration, make sure you know the value of the product and its true costs. Always make sure to check out the business at www.bbb.org.
Charity pitches. Most businesses are regularly asked to donate funds to needy causes, from requests to support the neighborhood’s latest fundraising project to appeals for sizeable charitable contributions. While most requests are legitimate, every year small business people become victims of fraudulent or deceptive charitable solicitation schemes. Make sure to always check out the charity at www.ny.give.org.
Coupon books. Small business operators are often approached to participate in coupon book promotions. The business offers discounts or extras in the coupon books that are sold by promoters to consumers. Problems occur if the promoters change the terms of the coupons to make them more attractive to buyers, when the books are oversold or when books are primarily distributed outside the firm’s normal business area. Make sure the coupon book is being promoted by someone you trust, and that the terms and conditions are clearly spelled out.
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. You can learn how to defend your company from a data breach with the BBB’s Data Security – Made Simpler at www.bbb.org/data-security.
