You might think setting up a business from scratch is tough enough, but small business owners have more to worry about than just loans or marketing strategy.
There are many scammers out there that specifically focus on small businesses as they rely on their relative inexperience and urgency to grow their business.
It is important to be wary of these scammers so that you can avoid losing all that money, putting your business further at risk. Here is a list of some common scams small business owners might come across so that you know what to look out for.
1. Be Wary of Tech Support Scams
These scammers prey primarily on the lack of knowledge business owners have regarding the technology they use. They might approach you with a call or e-mail explaining the problems in your system and might intentionally make it harder for you to understand the problem.
They will create a sense of urgency, for example, saying that your personal information is at risk of getting leaked. Furthermore, they will also try to convince you that they are a famous company in the industry and will provide you with false credentials.
When you agree to their offer, your business might lose more than just money. They could gain access to other sensitive information such as passwords and pin codes.
That is why you should always verify information from such offers and do your research. At times, a quick Google search to verify that they have a website is not enough as it could be a fake site. Try looking for user reviews from trustworthy sites such as BizReviewed blog.
2. Injury Scams
Scams are usually done by people after they have adequately gained your trust; therefore, some of the most well-known scams are done by workers or customers. These scammers will find a way on the premises of your company and will claim to have sustained an injury but in reality, the injury is false.
Workers are likely to fake injuries to benefit from workers’ compensation. When someone sustains injuries due to the negligence of your business, you will be held liable in this situation.
However, workers might lie about getting hurt and demand you to cover their medical expenses, paid leave, and further compensation. Similarly, scammers will try to enter the premises of your business and then claim to be injured.
This does not mean that you have to ban all workers and customers from your business. There are ways around it, for example, make sure to have insurance to help you cover these costs.
Furthermore, install a good security system around the premises of your business so that if you come across such scammers, you will have evidence against them. This can prevent the loss of a huge sum of money for your business.
3. Ransomware Viruses
Ransomware scams are probably a bit scarier because they are harder to identify and prevent. Small businesses might not be able to rely on the same IT protection larger businesses enjoy. This means that the sensitive information of small businesses is more likely to be at risk.
Usually, through really convincing e-mails or phishing e-mails, scammers attach websites through which they can encrypt your business’ data. The purpose of this is to hold your valuable data from you until you pay them a hefty sum of money.
There might not be a perfect way to avoid this but there are ways to decrease the chances of it happening. While training your employees, inform them about such scam e-mails and train them not to open links from unknown or suspicious senders.
Installing antivirus software and a firewall can also help to prevent viruses from stealing and encrypting your data.
4. Fraud Through Overpaying Checks
As previously mentioned, many of the scam incidents could be from customers themselves. At times, customers will pay for their order through a check and will enter a sum larger than their due.
Just as you may expect in this situation, they will ask you to wire the extra money back to them, even with a sense of urgency.
After sending the money, you will realize that the check they gave you will bounce, meaning that they gave you a phony check. This will leave you with a lot of money lost to a scam and a fake check.
5. Scams in the Name of Legal Matters
If you don’t do your due diligence on the legal matters of a business, you could become a victim to scammers pretending to be government agencies, forcing you to pay ransom fees and taxes that you are not meant to.
For example, scammers could trick you into thinking that they will provide you with a grant for a fee.
When you receive such calls or e-mails, especially from individuals who rush you to pay these fees, always ask for verification of their identity or do your research on their claims.
Contact official agencies through their given contact details and verify if they called you for such reasons.
6. Invoice Scams
The day to day operations of any business requires a lot of transactions, meaning that you probably are not unfamiliar with a large stack of invoices.
When paying bills or paying off deliveries, scammers sometimes send in fake invoices for services or products the business has never purchased.
If they are careful enough, they will do their research on your suppliers or companies you have worked with before and they will send in invoices that look similar to those so that suspicion does not arise from it.
If your employees don’t think twice and complete the transaction, you will lose a large sum of money.
With so many things to take care of, you might think that catching a well-crafted invoice is impossible. However, there are still tell-tale signs of a fraudulent invoice such as changed contact information.
Small businesses have the added incentive of protecting their finances as their budget might be tight, so a few scams could even mean the downfall of their business.
However, if you stay vigilant, train your employees well, and take the necessary precautions, you will be able to prevent such disasters.