Someone or something has figured it out: You’re a small business owner. Whether it was the robots, algorithms or some mysterious force in the universe, the result is an email inbox filled with offers and pitches for various products and services.
While you’re pretty good about ignoring these and making sure they get swept into the trash, it’s another reminder of how our technological age can be a double-edged sword. On one hand, it’s easier than ever to connect with others and get your hands on the information you need for just about anything.
On the other hand, technology makes it easy for scammers to learn all about you and use that information against you to make a convincing play for your money. Because of that, small businesses lose a whopping $7 billion a year to scams.
How scammers trick small business owners
Scammers are masters of human psychology. They know just what to say to make you believe that what you are seeing and hearing is real. Here is a closer look at how they pull it off.
Scammers impersonate: Those who are targeted by scams are often surprised. They’re watching out for fake invoices from companies they've never heard of. But there are scammers who pretend they are representing a vendor you already know and work with.
Scammers create a sense of urgency: The voice on the phone and the sender of the online invoice is insisting your past-due payment is due immediately. They may even threaten you with scary consequences, like a lawsuit or canceled delivery. Their goal is to create panic so you’ll hustle into action before your cooler-headed self realizes what’s happening. For that reason, it’s always smart to pause and investigate the claim.
Scammers ask for … cash? Scammers want to make sure they can get their money in ways that can't be tracked back to them by investigators. For that reason, they may ask you to wire the money, or give payment on a reloadable card.
Scams that every small business owner should know
How do scammers trick small business owners and employees into reaching for their credit cards and writing that check? Here are a few schemes to be aware of.
- A box of merchandise you never ordered arrives, such as office supplies, and it's followed by a demand for payment.
- Notification that a professional license is due and payment is due immediately.
- Notification that a domain name is about to expire.
- Notification that your business will not show up in online search engine results unless a fee is paid.
- Bogus awards that require a hefty payment.
- Phony directory service or online ads. It starts with a routine-sounding phone call, asking you to provide or confirm details for a directory service listing. Then, an invoice arrives, demanding payment for the listing or even an online ad.
As your business grows, it’s important to be mindful of how you can build your procedures and processes to prevent you and your employees from falling for one of their tricks.
For insights and training tips, visit the Federal Trade Commission’s website and download this helpful guide, Scams and Your Small Business. You can order print copies for free or download the PDF to your desktop.