Small Business Scams: How To Spot And Avoid

Small business scams are schemes that target small business owners, aiming to deceive them into paying for goods or services they don’t need or that don’t exist. It’s crucial to recognize the signs of these scams and know how to protect your business. In this post, we’ll discuss what small business scams are, how to spot them, and tips for avoiding them.

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What are Small Business Scams?

Small business scams are fraudulent schemes that target small business owners, often using deceptive tactics to trick them into paying for unnecessary or nonexistent services. These scams can take many forms, such as fake invoices, directory listing scams, or phishing emails.

WHAT TO LOOK FOR

Small business operators and individuals with their own Internet sites continue to be confused and caught by unsolicited letters warning them that their Internet domain name is due to expire and must be renewed, or offering them a new domain name similar to their current one.

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If you have registered a domain name, be sure to carefully check any domain name renewal notices or invoices that you receive. While the notice could be genuine, it could also be from another company trying to sign you up, or it could be from a scammer.

• Check that the renewal notice matches your
  current domain name exactly. Look out for
  small differences—for example, “.com” instead
  of “.ca” or missing letters in the URL address.

Another common approach used by scammers is to call a firm asking to confirm details of an advertisement that they claim has already been booked. The
scammer might quote a genuine entry or advertisement your business has had in a different publication or directory to convince you that you really did use the
scammer’s product.

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Be wary of order forms offering advertising opportunities in business directories. These order forms may look like they originate from a well-known supplier of directory advertising, when they don’t.

• Check that the renewal notice comes from the company with which you originally registered your domain name.

• Check your records for the actual expiry date for your existing domain name.

A directory listing or unauthorized advertising scam tries to bill a business for a listing or advertisement in a magazine, journal or business directory, or for an online directory listing.

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The scam might come as a proposal for a subscription disguised as an update of an existing listing in a business directory. You might also be led to believe that you are responding to an offer for a free listing when in fact it is an order for a listing requiring later payment.

An office supply scam involves you receiving and being charged for goods that you did not order. These scams often involve goods or services that you regularly order— for example, paper, printing supplies, maintenance supplies or advertising.

You might receive a phone call from someone falsely claiming to be your “regular supplier”, telling you that the offer is a “special” or “available for a limited time”, or pretending to only confirm your address or existing order. If you agree to buy any of the supplies offered to you, they will often be overpriced and of bad quality.

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Tips to Avoid Small Business Scams

1. Verify the Company: Research the company offering the services to ensure they are legitimate and have a good reputation.
2. Read Contracts Carefully: Review any contracts or agreements carefully before signing, and seek legal advice if necessary.
3. Use Secure Payment Methods: Use secure payment methods, such as credit cards or payment platforms, that offer fraud protection.
4. Educate Your Employees: Train your employees to recognize and report potential scams, and establish clear procedures for handling unsolicited offers.

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Conclusion

Small business scams can have a significant impact on your business’s finances and reputation. By understanding the signs of these scams and following the tips mentioned above, you can protect your business from falling victim to fraudulent schemes. Remember, it’s always better to be cautious and verify the legitimacy of an offer before making any payments or commitments.