Scammers always have one goal: to swindle your small business out of its hard-earned money. Nowadays, they make clever use of technology to target you. These sophisticated attacks hope to psychologically fake you out – so you won’t realize you’ve been conned until it’s too late.
Don’t be fooled. Keep reading to learn how to protect your business and what scams to look out for in 2022.
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Scams Are Nothing New, But Technology Makes Scamming Easier
You do your best to avoid becoming the victim of a scam. You have online security protocols, keep a paper trail, and are wary of unsolicited emails.
But thieves are even more cunning in the digital age and know how to use technology against you.
So, make sure you also watch out for these red flags:
- Request for payment by methods with no paper trail: wire transfers, prepaid debit cards, and gift cards
- Request for payment that attempts to avoid multi-factor authentication
- Immediate request for payment (usually paired with an emotional plea or personal emergency that makes one of the previous two red flags “necessary”)
- Email demanding immediate confirmation of confidential information
- Related: email body is generic and/or lacks your personal account information
- Any misspelling of company or person in the email body or contact info
- Urgent unexpected or unsolicited emails with attachments
- Related: too-good-to-be-true emails with attachments
- High-pressure sale tactics, such as entering into a commitment or payment during the first phone call/email exchange
- Unwillingness to answer questions
- Unclear terms and conditions
- Company name is similar to a well-known, big business
- Unable to find their company name or address on the internet
Scams Targeting Small Businesses In 2022
One of the best ways to avoid business scams is to be aware of them. This knowledge can also help you establish better anti-fraud protocols, security measures, and financial processes.
1. Bank Account Fraud
Fraudulent bank activity starts with stolen information and ends with account takeover, where thieves make unauthorized purchases or withdrawals. For a small business, this common scam is one of the biggest threats of financial loss.
Worse, since only individual depositors are federally insured, a small business cannot count on being reimbursed by their bank if money is stolen in this way. Rather, the bank can say it was negligence on the part of the company for not being properly vigilant.
Still, you’ll want to talk to your bank or a local accountant to discuss what to do in the case of unauthorized electronic transfers. Try to monitor your accounts daily, too.
And finally, avoid the number one way thieves gain access to sensitive information: phishing.
2. Phishing Email Scams
An urgent message comes in from your bank. Because you’re human and busy, you open it without a second thought – not realizing this malicious email has been sent to fish for sensitive information.
You may click a hyperlink to a “spoofed” website. It appears to be the real deal but this fake site allows scammers to collect your credentials and access your actual account. Or you may accidentally open the email’s attachment – one with ransomware that will attack your computer and mine it for sensitive information.
Using email spam filters can help avoid this. But remembering the red flags mentioned earlier is a better bet. And keep reading to learn why “spear-phishing” needs its own section.
3. “Spear-Phishing” Targeted Email Fraud
Spear-phishing emails impersonate someone that you wouldn’t think twice about trusting – so scammers trust that you won’t blink at requests for money, bank account access, or even gift cards.
This phishing scam is also called “Business Email Compromise,” and usually targets employees with access to company finances. Scammers study their victims and then send an urgent, persuasive, and credible financial request from the “spoofed” or hacked account. Often, it goes unnoticed for some time.
Having withdrawal protocols and double-checking financial requests is a good start to avoid this scam. But communication with your team and awareness is key.
4. Directory Fraud
Scammers call and pretend to be someone wanting to double-check your business’s information for their directory. Then, they slap you with a large bill for a phony listing.
Sometimes scammers will fabricate a directory, promising that this special listing will help you reach more customers or they’ll feign legitimacy as an actual, reputable company. Either way, when you get the hefty invoice a few weeks later, you’ll realize it’s anything but.
Always do due diligence and train your staff to do the same.
5. “Delinquent” Utility Bills
This scam involves a sudden threat to turn off necessary utilities, such as electricity, phones, or internet. By playing on your panic, scammers hope you’ll pay your “overdue bill” right over the phone and overlook the fact that your provider would have sent several notices beforehand.
Rather than pay right away, check your invoices, and then call the phone number on a recent bill to verify that disconnection is imminent.
6. Invoice Fraud
Scammers may sneak a phony bill into your pile of invoices to bilk small amounts of money from you. Usually, it’s for products or services that you never ordered, such as office supplies or web domain hosting. Or if they do their research, fake invoices with closely spelled names of vendors or companies that you do business with.
Another trick is to put “Past Due” on their invoice, usually accompanied by an official-looking seal from a government agency. These notices will claim that if you do not pay immediately, you will be out of compliance with the law.
Having procedures to handle invoices and double-checking bills can help avoid this. Another tip is to use accounting software that ensures that vendors’ names and addresses are all correct – or to utilize a small business CPA.
7. Charity Scams
Both the general public and small businesses should be alert to fraudulent charity solicitation in 2022. Scammers take advantage of the high number of charities and count on their fake donation requests hiding in plain sight.
Simply being aware that there are fake charities out there is a good first step. But also, it’s always a good idea to research the organization that you’re donating to.
8. Phone Scam to Acquire Small Business’s Loan Relief
A small business will receive a phone call from a friendly, polite, and professional scam artist pretending to be a representative from the Small Business Association. They have news about your loan but need some information first.
In reality, though, the scammer wants to re-route your financial relief into their account.
Again, always make sure that whoever is calling is legitimate. Verify contact information and be wary if someone asks for sensitive information over the phone.
What To Do When a Scammer Contacts You
Collect what information you can about the scam artist and then alert Nevada’s state consumer protection office. If you’ve lost money, also file a police report.
You can also report a suspected scam to the Federal Trade Commission, which collects scams, either online or by phone. Please note, however, federal agencies do not assist you with recouping lost funds.
For more information about reporting scams, follow this link: https://www.usa.gov/stop-scams-frauds.
To help protect other small businesses, report suspected scams to the Better Business Bureau. And spread the word via social networks and LinkedIn.
Protect Your Business And Assets With a Trusted Las Vegas CPA Firm
Though the internet has created new, opportunistic avenues for scam artists, it is also a place to spread the word and learn how to protect yourself. And knowing what thieves may target is half the battle. Be wary of phishing emails and spoofed websites, and always verify who is contacting you. Also, make sure to safeguard your personal information and train your employees to do the same.
Finally, do due diligence with your finances. Talk to a trusted accountant to ensure that your small business and assets are safe.
Look no further for a CPA firm in Las Vegas than Larry L. Bertsch, CPA & Associates. We’re here to help and happy to do it. Contact our team today for a free consultation.
