Consumers aren’t the only victims of fraud. Wynn at Law, LLC
hears about thousands of small business scams every year. A reward of our
business is being able to work with entrepreneurs to get a business off and
running (see related article). It doesn’t take much more than a single scam to
derail that dream.
These days it’s fairly simple to pop up an official-looking
website and professional – but fake – letterhead. Aside from the possible
remuneration from and legal ramifications for the scammers, if they’re caught,
once the business owner parts with the money for a scam, the money is gone.
Wisconsin’s Better Business Bureau notes, “We
continually see various scams against small businesses and they seem to be
increasing each year.” Some of the common small business scams reported to the
BBB include:
1.
Phony invoices. Businesses receive fake invoices
demanding payment for product or services they never ordered or received.
Often, if you look closely, you’ll see fine print that identifies the bill as
an actual solicitation for business. Generally, the amount is small enough to
not raise a red flag. Make sure that the business billing you is a business
with whom you are familiar. If not, question it. Wynn at Law LLC’s best small
business clients limit the employees authorized to place orders or pay
invoices.
2.
Directory scams. A problem that has plagued
businesses large and small for decades involves deceptive sales for
directories. Scammers call claiming they want to update the company’s
information for an online directory… when they could be using the info to set
up your business for identity theft. Otherwise, they may also try to upsell
your listing in a directory that’s irrelevant to you or your customers, or
doesn’t exist at all. Do not give out information about your business to
anyone, unless you know for what the information will be used.
3.
Charity pitches. Even new businesses are
routinely asked to donate funds to needy causes. While many requests are
legitimate, every year small businesses become victims of fraudulent or
deceptive charitable solicitation schemes. If the charity isn’t on give.org,
don’t give.
4.
Coupon books. Small business operators are often
approached to participate in coupon book promotions. They seem like an
inexpensive way to advertise your start-up. 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 our
area.
The fifth scam is among the most
prolific – with terrifying outcomes. Internet & phone scams are a common nightmare.
Watch out for ransomware, phishing, URL hustles, and spoofing scams. Scammers
play on fear, convenience and lack of technical knowledge. Installing a
protective software program like Norton or McAfee is a good start. A ‘firewall’
is recommended because it keeps your inside information inside… which includes
your customers’ information. These days, you’re flirting with disaster by
clicking on any links in unsolicited emails. One recent tip we heard was to
shut off the preview pane on email inboxes to avoid emails a spam filter
missed.
*The content and material
in this original post is for informational purposes only and does not
constitute legal advice.
Photo by Brian Jackson, used with permission.
