7 Small Business Scams to Look Out For

You might think that since your business is small, it won’t be an attractive target for scammers. Sadly, the opposite is true. Small organizations are actually targeted more frequently than larger companies, often because they lack the resources (both money and people) that bigger operations can invest in fraud prevention and detection measures.

Common Scams (and How to Protect Your Small Business)

Knowing what to look for can help you protect your company. So take a minute to read up on the most common scams that small businesses are encountering right now.

1. Phishing Scams

A phishing scam is an electronic message sent to you via email, text, or messaging app that’s “fishing” for information. It will ask you to do something, like login to an account or call someone who will then ask you for sensitive information.

Once you’ve taken the bait, the bad actor on the other end will use that to defraud you. They can use your legitimate login credentials to access your real account or take the personal info you provided by phone to steal your identity, for example.

To spot and prevent phishing scams:

• Take advantage of anti-phishing protection offered by your email service provider.
• Verify the request by reaching out through known channels.
• Make sure the sender’s email address and any links go to legitimate email and website domains.

2. Fake Invoices and Orders

If you click on a link or attachment in a fake invoice email, you could open up a Pandora’s box and inadvertently install malware or ransomware on your device. From here, hackers can steal all kinds of data from your device – from your financial details to customer payment info.

You may also get emails asking you to submit payment online for products or services a sender claims you ordered or purchased. If you don’t have measures in place to doublecheck the legitimacy of the purchase and the sender’s information, you could end up paying for something you didn't buy and give away your sensitive payment information in the process.

To prevent losses from fake invoice scams:

• Doublecheck your records to see if you placed the order for goods or services.
• Verify the legitimacy of the invoice by reaching out through a known channel.
• Make sure the sender’s domain and any online links correspond to the organization it purports to represent.

3. Domain Registry and Renewal

Unless you register your business’ website and email domain name (e.g., yourbusinessname.com) privately, scammers can get your domain and contact details easily. One of the most common scams that results from this is getting emails from senders who claim that your domain, website, or email account is up for renewal, and that if you don’t pay up immediately, you’ll lose it.

To avoid falling prey to this common scam:

• Opt for private domain registration (even if it costs a few dollars more), or choose a domain registrar that includes private domain registration for free.
• Keep good records of where you purchased your domain, web hosting, and email services, including service providers and terms of service (e.g., expiration dates).
• Set up automatic renewals and payments with your domain, website, and email hosting services.

4. Business Review Scams

Scammers can leave fake reviews on Google or sites like Yelp, TripAdvisor, Facebook and other platforms, and then reach out to you with a ransom-like demand or to offer review removal services. But all of these platforms have processes for reporting fake reviews, so don’t risk making payments to bad actors.

To respond to fake business reviews:

• Follow the steps provided to have the platform evaluate and remove the fake reviews.
• Respond to negative reviews promptly with an offer for the reviewer to make contact for resolution.
• Doublecheck whether the reviewer is a legitimate customer of yours; if not, note in your response that you don’t believe you’ve done business with them.

5. Tech Support (Malware) Scams

Tech support scams often appear in the form of popups or emails but may also come in via telephone cold calls. Falling prey to one of them can devastate your small business since it generally involves giving them access to anything from your servers to computers or online accounts. This could result in your accounts being hacked, your customer data stolen, your devices destroyed, and more.

Before giving anyone access to your equipment or accounts:

• Use internet popup and ad blockers.
• Install security software on all your devices and keep it updated.
• Take advantage of malware and virus protection offered by your web and email hosting providers.
• Leverage the expertise of professional IT services and consultants.

6. Advertising or Directory Listing Scams

Directory listing and advertising scams are like fake invoice scams. In essence, you’ll receive a request by email or phone call to list (or renew your ad or listing) in a directory that sounds legit, like the Better Business Bureau, Yellow Pages, etc.

The sender will then forward a bill to you by phone or mail. If you make payment, not only will the scammer be getting free cash, but they will also likely have access to your payment information, allowing for even more mischief.

Before paying a listing or advertising invoice you don’t recognize:

• Check your records to see if you placed an ad or listing in the directory.
• Reach out to the directory itself to verify the legitimacy of the request.

7. Social Media Scams

Social media offers a slew of opportunities for scammers. Some of the most common are:

• Fake profiles reaching out for a quote (often requesting an odd payment setup).
• Influencers offering to promote your business for a fee.
• Phishing scams looking to get sensitive details about you or your business.
• Fake invoices and orders.
• Vanity awards (e.g., get your business listed in a Top 100 or “Best of” list for a fee).

Always do your due diligence on social channels. Before responding to offers in messages or comments, verify the identity of the individual or organization. Make sure you placed an order before paying any invoice. And reach out to the platform to report fake accounts, reviews, and offers that seem like they could be scams.

In addition to the actions you can take to protect your small business from scams like these, take time to build processes and procedures for training your employees. The better you and your staff are at spotting fakes and scams, the better you will be able to safeguard your company against loss.