BBB Tip of the Week: Scams and small business report in partnership with the FTC

The Better Business Bureau has had a long relationship with the Federal Trade Commission. We assist with its investigations when we can, and the BBB and the FTC meet on a regular basis with the Consumer and Business Education team at the FTC to discuss issues of mutual interest, which is how this initiative came about.

“Scams and Your Small Business” is available at www.bbb.org/SmallBusiness in both English and Spanish, and includes information on scammers’ tactics, how small businesses can protect themselves from scams, common scams that target small businesses, how to report a scam and related resources on www.bbb.org

Riskiest scams for small businesses

Bank/credit card imposter scams were the riskiest scams, as scammers were under the guise of verifying account information. Scammers fool their targets into sharing credit card or banking information.

Directory listing and advertising scams are the second-riskiest scams for small businesses. As new businesses begin to grow their customer bases, they are looking for new ways to get the word out about their products and services.

Scammers ask them to pay for an advertisement in a directory, or “Yellow Pages.” In other cases, the directory is a total fake and the ad is never placed anywhere.

Fake check scams are the third-riskiest and are used as a tactic for a variety of scams. Sometimes the check is a payment for products or services, but it’s an overpayment and the scammer asks the business to wire back the difference. In other cases, they ask the overpayment to be sent to a third party for taxes or to purchase supplies.

In either case, businesses are asked to deposit a fake check and wire the difference. The business later learns the check they received is fake after they’ve wired money to the scammer, and the business is liable for the missing funds.

What can business owners do to protect themselves, their employees and their businesses?

Train and inform your employees. Discuss scams during team meetings, encourage employees to talk about it with their coworkers, train them on how to respond to random phone and email requests.

Verify invoices and payments. Never pay until you’ve confirmed you received the goods or services. Create clear procedures for approving invoices and make sure major spending can’t be triggered with an unexpected call, email or invoice.

Be tech-savvy. Don’t believe your caller ID (they can fake this). It’s easy to create legitimate-looking websites and emails. Don’t open attachments or download files from unexpected emails. Secure your files, passwords and financial information.

Know who you’re dealing with. Do research on a new company before doing business and check BBB.org. Ask for recommendations from other businesses.

If you want to see the whole report you can see it on our website: www.bbb.org/smallbizscams.