Skip nav to main content.

Financial Education

Seven scams targeting small businesses

MADISON, Wis. (1/10/11 CUNA)–Small businesses should note seven scams, according to the Better Business Bureau (BBB).”Small-business fraud can come from internal threats, such as employee fraud, or from external full-time scammers,” said Alison Southwick, BBB spokeswoman. “Because small-business owners often lack the time and resources to fight fraud, they are a popular mark for any number of different scams” (LoneStar Leaguer Jan. 5).Credit unions can warn their business members about these scams: 

  • Directory Scams–Usually the scammer will call a business to “update” the company’s entry in an online directory, or the scammer might lie about being with the Yellow Pages. The business is later billed hundreds of dollars for listing services it didn’t agree to or for ads which it thought would be in the Yellow Pages.
  • Office Supply Scams–Some scammers prey on small-business owners and hope they won’t notice a bill for office supplies–such as toner or paper–that the company never ordered.
  •  Overpayment Scams–Businesses should be cautious if a customer overpays using a check or credit card and then asks the business to wire the extra money back to them or to a third party. Overpayment scams often target catering businesses, manufacturers, wholesalers and even sellers on sites like eBay, Craigslist and Etsy.
  •  Data Breaches–No matter how vigilant a company is, a data breach can still happen. Whether it’s the result of hackers, negligence or a disgruntled employee, a data breach can have a severe impact on the level of trust customers have in a business.
  •  Vanity Awards–While it’s flattering to be recognized for hard work, some awards are just money-making schemes and have no actual merit. If approached about receiving a business or leadership award, research the opportunity carefully and be wary if asked to pay money.
  • Stolen Identity–Scammers often will pose as legitimate company to rip off consumers. A company whose identity is stolen doesn’t necessarily lose money, but its reputation is potentially tarnished when angry customers ripped off by the scammers think the real company is responsible.
  • Phishing e-mails–Some phishing e-mails specifically target small-business owners with the goal of hacking into their computer or network. Common examples include e-mails pretending to be from the Internal Revenue Service that claim the company is being audited, or phony e-mails from the BBB saying the company has received a complaint. Companies receiving a suspicious e-mail from a government agency or the BBB should not click on the links or open attachments. Contact the agency or the BBB directly to confirm the legitimacy of the e-mail.

Leave a Comment