With the coronavirus causing major disruption to most industries and the global economy, many small businesses are struggling to stay open. Unfortunately, this precarious position makes them more susceptible to scammers who took advantage of this vulnerability. If you own a small business, here are the latest scams that you should watch out for and some extra tips on how to avoid them.
Many small business owners are independent contractors or freelancers who must often search for new work. However, the Better Business Bureau reports that employment scams are the most common scam reported to the organization.
One sophisticated scam that targets these individuals is a recruiter scam in which the criminal poses as a recruiter for a well-known company. The criminal (and his team) often thoroughly research the business owner, including the people they know and their professional work history, which can often be found simply by looking at their social media information or LinkedIn account. The scammer uses this detailed information to make a targeted pitch to the business owner. When the business owner shows interest in the job, the fake recruiter then asks for personal information to complete a background check. There is no job, but the recruiter may be able to get away with a stolen identity.
Work from Home Scam
The work from home scam is nothing new, but it’s seeing a resurgence due to social distancing guidelines. People are being laid off in record numbers and small businesses are looking for new revenue streams to support their businesses. The internet’s wide reach makes this scam particularly successful during this challenging time.
This scam can take on many forms, including offering jobs like:
- Envelope stuffing
- Medical billing
- Craft assembly
- Transcription work
- Multi Level marketing
Scammers get their money by charging for supplies, training, or worthless certifications they claim are necessary to do the work. But there is no work.
Fake Invoice Scam
With much of your business now being conducted online, you may have a slew of invoices that are coming in. With this scam, a scammer slips in a fake invoice, claiming that it provided you with some product or service, such as office supplies or membership into a trade organization. These invoices may be sent over email and may seem convincing and look authentic.
Business Coach Scam
In this scam, fake businesses claim that they can offer you business coaching services so that you can rapidly expand your business. However, you may pay for a series of sessions with a purported business coach or schedule an online seminar only to find that the business coach doesn’t show up or offers such generic information it’s not worth the investment you made.
Detecting and Avoiding These Scams
Every day, creative scammers develop new ways to try to take your hard-earned money. It’s important to be vigilant and to stay on guard to avoid becoming a victim to these scams. Falling for one of these scams can result in the loss of your personal or business identity, fraudulent charges, and damage to your reputation.
The first step in preventing these serious consequences is to learn how to spot these scams. Watch out for these common warning signs of scams:
- The scammer contacts you
- Upfront fees
- High-pressure sales tactics that try to get you to act now
- Use of intimidation or fear
- Use of untraceable payment methods, such as gift cards or wire transfers to other countries
Next, you will want to train your employees to spot these scams. Do not authorize the payment of invoices without first verifying them. The Federal Trade Commission offers a free brochure you can use to train your employees about small businesses and scams. Be sure that your employees are aware of proper protocol and that they follow them.
Secure your business’ files, financial information, and passwords. Also, consider using an enhanced identity theft protection that will carefully monitor your business and its credit information for possible infiltration
Investigate any new contacts. Review their information online and look for any online complaints about them. Avoid giving them any sensitive information about your business before you verify that they are who they say they are and that they are legitimate.
Understand that these scammers are often tech-savvy and may use email addresses and websites that appear legitimate. Avoid opening any attachments or clicking any links until you are absolutely certain they are safe. Increase your defense against these companies by installing virus and malware protection software on all of your devices you use for business..
While the internet can open up new possibilities for your business during this challenging time, it can also create a web of deceit. Proceed with caution and report any suspicious activity immediately.
Daniel William is Content Director and a Cyber Security Director at IDStrong. His great passion is to maintain the safety of the organization’s online systems and networks. He knows that both individuals and businesses face the constant challenge of cyber threats. Identifying and preventing these attacks is a priority for Daniel.