• 5 Scams Small Business Owners Should Look Out For

As a small business owner, you are aware of the numerous criminal organizations that exist for the sole purpose of scamming businesses like yours. Whether it be your hard-earned cash, customer information, or installed viruses, hackers prey on small businesses that lack the I.T. that larger companies can afford. Read on to learn about the hazardous scams you should look out for to protect your small business.

 

5 Small Business Scams to Avoid

1. IRS Phone Call Scam

How it Works:

Dubbing itself as one of the most common scams in the game, the IRS phone scam has been around for decades yet still poses a serious threat. Small business owners receive unsolicited phone calls from con artists claiming to be IRS officials, and demand the victim pay some sort of phony tax bill. They convince the victim to send cash, usually through wire transfer in order to make it difficult to trace back to the culprit. Many phone scams even use threats to intimidate the victim into paying, including threatening to arrest, deport, or revoke the driver’s license of the victim if they don’t get the money.

How to Protect Yourself:

The IRS has a list on their website of signs that indicates the difference between the scam and actually being contacted by the IRS. The IRS will never:

  • Call over the phone. The IRS will first mail a bill to any taxpayer who owes taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.
  • Source: IRS

2. Check Overpayment Scam

How it Works:

With numerous transactions being completed daily, many small businesses lack the time and resources to pay close attention to all payments they are receiving. Scammers will oftentimes send a check to the business for more than a product is listed for and come up with a bogus reason to support their action. The con artist will then ask the business to wire back the difference, which often times the seller does. After the scammer’s check bounces, the seller is left liable for the entire amount.

How to Protect Yourself:

If you’re selling something online, you should never accept a check for more than the selling price, no matter how tempting the offer or persuasive the story. Ask the buyer to write the check for the correct amount, and if the buyer refuses, return the check. Know who you’re dealing with, and always avoid wiring money to strangers.

3. Fraudulent SEO Scams

How it Works:

As a small business owner, you understand the value of search engine optimization and how it can benefit your business. What you may not understand, however, is that there are con artists online trying to scam you with claims they can’t back up. Small business owners who fall victim to this type of scam normally receive spam emails or phone calls from con artists claiming to have the ability to “guarantee your listing on the first page of Google” or have some sort of “special relationship” with Google. Sounds good to be true, right? That’s because it is. Although you might see your Google ranking skyrocket within the first few days, Google will quickly catch on and send your site far down past the first page.

How to Protect Yourself:

The best defense against SEO scams is becoming more educated about the subject. As a small business owner, you should always do research when being contacted unexpectedly by outside sources you have never heard of. Claims that should raise a red flag are:

  • “Guaranteed #1 Rankings”
    No one can guarantee a #1 ranking on Google. Google even wrote an article warning small business owners of SEO con artists that claim to guarantee rankings, allege a “special relationship” with Google, or advertise a “priority submit” to Google (Source: Google).
  • “Secret” SEO Strategies
    Hmmm, a secret magic potion to make all my SEO problems go away? Try again. A legitimate SEO company should be transparent with the solutions they offer to optimize your website ranking, so if the firm mentions they have some undisclosed technique to boost you to the top, avoid it at all costs.
  • “Lowest Price SEO”
    SEO is hard work and takes time and effort to do correctly. Any firm whose selling point is “lower than the competition” should be evaded, because as the saying goes, you get what you pay for.
Psst…for real SEO tips, download our free SEO Pocket Guide

4. Vanity Scan

How it Works:

Winning awards is a fantastic way to build credibility for your business, and small business owners love feeling recognized for their effort and dedication. This type of scam preys on the pride of these hard-working individuals by offering some sort of lucrative award for a hefty premium. Scammers will oftentimes title these bogus awards “Best of” a certain region, and after the victim pays up, they find themselves with no such award and hundreds of dollars lost.

How to Protect Yourself:

Most authentic awards don’t require you to pay any sort of premium, so the first thing you should do is ask questions. Con artists aren’t going to have a script written for each and every question you ask, and businesses and organizations that offer legitimate awards will usually be willing to provide detailed information. The Better Business Bureau also suggests you do your research to ensure the offer is legit, as business owners have likely reported similar scams in the past.

5. Phishing

How it Works:

Small business owners are overwhelmingly on the receiving end of cyber attacks. According to a recent study, almost 75% of companies targeted by malicious hackers are small shops. Phishing – or email hacking – is an emerging scam that targets owner’s personal information, such as their social security number, credit card information, and in some cases, sensitive customer data. Fraudulent emails are sent out enticing owners to click on links which in turn installs infections that corrupt some of your most sensitive business machines, costing the small business thousands of dollars to fix.

How to Protect Yourself:

If you or any of your employees receive emails from an unfamiliar address with sketchy links, the red flag should be raised. If an email looks phish-y, call the sender to verify. The sender should be able to describe to you the purpose and reasoning behind the message they sent you, and if they cannot verify, you should delete the email immediately and contact the Federal Trade Commission’s online Complaint Assistant.

Sources:
How Stuff Works
Huffington Post

 

 

Fraud is not the only thing you need to protect with your small business…don’t forget reputation! Download our free eBook below to make sure you’re on track:
Matt Diefenderfer
Matt Diefenderfer
Matt is a 2018 summer marketing intern who is also a rising senior at Bryant University. Matt plans to graduate next spring with a major in marketing and a double minor in sales and legal studies, and enjoys fishing and playing golf in his free time.

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