Small, local businesses are more vulnerable to scams than larger corporations, according to the Better Business Bureau (BBB).
"Scams can impact every business, regardless of location, size, or industry," a press release from BBB stated. "But they are especially a problem for small businesses. Local businesses and start-ups often don’t have the cyber security support or established accounting processes of larger companies."
With this in mind, BBB has provided tips for small business owners and employees to ensure they know about common business scams.
According to BBB, one common scam is known as Business Email Compromise (BEC), which is an email phishing scam that typically targets people who pay bills in businesses, government and non-profit organization.
"In BEC fraud, the scammer poses as a vendor or other trusted source, who sends an email to an accountant or chief financial officer," BBB's release stated. "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."
Another example of a scam is when businesses receive fake invoices demanding payment for products or services they never ordered or received. The most common scams, according to BBB, involve office supplies, website or domain hosting services, and directory listings.
"Often, if you look closely, you’ll see fine print that identifies the bill as a solicitation," the release stated. "Generally, the amount is small enough to not initially raise a red flag."
Directory scams are yet another form of fraud businesses should look out for. This scam involves con artists attempting to fool businesses into paying for a listing or ad space in a non-existent directory. In some cases, according to BBB, the directory will, in fact, exist, but the ad won't actually be distributed to potential customers. Other times, the scammer might lie about being with a legitimate directory.
"Either way, the business is billed hundreds of dollars for listing services they didn’t agree to or for ads that were never placed," BBB stated.
Scammers also pretend to be a legitimate company in order to trick consumers and steal their identity, according to BBB. Many set up fake websites and “hijack” a company name and address. They may also use "brand hijacking" – the blatant copying and misuse of company logos and website content – to impersonate a business and deceive unsuspecting visitors.
"In this con, the company doesn’t necessarily lose money," BBB said. "However, their reputation is tarnished when angry customers who were ripped off by scammers think the real company is responsible."
Other scams include fraudulent or deceptive charity pitches, phishing scams – which attempt to steal sensitive information about your business – office supply scams, coupon book scams and vanity award scams.
Overpayment scams are also prevalent, according to BBB, and should be watched out for.
"In this scam, the person you are doing business with sends you a cheque for more than the amount they owe you," BBB stated. "Then, they instruct you to wire the balance back to them. Or, they send a cheque and tell you to deposit it, keep part of the amount for your own compensation, and then wire the rest back. The results are the same: the cheque eventually bounces, and you’re stuck, responsible for the full amount, including what you wired to the scammer."
According to BBB, businesses can protect themselves against scams by keeping good records, being extra careful with payment procedures, and double checking vendors. Business owners should also be careful what information they share with others, and should protect devices.