Laura was a new employee, alone in the office of a flooring company.
She got a call that the power bill hadnt been paid and was about to be shut off.
She was told to immediately go to a specific convenience store to pay the bill, with cash.
She called her boss, and they quickly strategized how they would pay it.
The bank recognized this common utility scam and flagged it when they were getting cash.
Looking back, it was easy for Laura and her boss to see the red flags of a scam.
But scammers instill a sense of panic so people dont stop and think.
Starting a business can be a labor of love.
There are hundreds of little details to take care of.
Scammers know that, and take advantage of it in multiple ways.
Scams targeting small businesses and entrepreneurs have stolen billions of dollars over the last few years.
The number of scams themselves decreased, but the amount stolen soared.
Every business owner needs to be alert.
How to Prevent Small Business Scams
There are many common small business scams.
We will help you understand and identify the scams and learn how to prevent most of them.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Phishing is manipulating someone through email into giving that information, often by impersonating other people or companies.
Spyware allows the sender to see your keystrokes and activity, and use it for identity theft.
Did you know?
Types of Small Business and Entrepreneur Scams
Scammers rely on peoples inattention and natural trust.
They create a sense of urgency and panic so people wont think twice.
They make offers too good to be true, using peoples vulnerability.
One of the reasons for stealing your information is so scammers can steal your businesss identity.
They can use your bank and credit card accounts and even establish new accounts in your name.
Be careful about releasing your TIN (tax id number) and other financial identifiers.
They might give a shot to degrade your business so a competitor has an advantage.
Heres a look at some of the common scams out there.
There are several types of imposter scams.
Email, invoice, Docusign, phone call or text imposters come at you from every direction.
An imposter scam that is growing increasingly common is theDocusign scam.
Heres how it works: A business sends a document supposedly via Docusign.
It might contain legitimate looking URLs, but if you hover your mouse over them (dont click!)
they may show a different address.
If you are wary about a docusign email, reach out to the company and report it.
Scammers send invoices from a familiar-looking company or email address.
While the name might seem right, theres usually a noted difference.
For instance, the email address might come from @thepenyhoarder.com rather thanPennyHoarder.
How do they do it?
Once you pay the fake invoice through the fake page, they have your credit card or banking information.
Scammers might also send merchandise that you didnt order but demand that you pay for it.
One of the fastest growing scams types, utility scams come in two flavors.
Scammers also masquerade as a government or private assistance program and offer to help pay utility bills.
All you have to do is give them your credit card information, account numbers and passwords.
Phishing, Ransomware and other Email Scams
These can be devastating to your business.
Scammers know that much of your business is digital.
Communication, accounts, bill paying all of it is online and on your gear.
Be diligent when opening emails and clicking on unknown links.
Then you are connected to the scammer who will steal your information and money.
Always have a backup of important information on another gear.
You might think you are going to a legitimate website, but youre not.
Always research reputation management companies.
Investment scams made up $3.6 billion of the $8.8 billion scammed in 2022.
It is especially important for entrepreneurs to be diligent about investment scams.
They offer special tricks and positive testimonials that are totally fake.
Or that your real estate career will immediately take off with their special training.
TheFTChas very good information about identifying these scams.
Scam Prevention Tips
There are common red flags for scams.
The easiest way to prevent being scammed is to pay attention to the details.
Businesses can set policies that prevent being scammed, and those policies can also help prevent fraud.
Legitimate government agencies and businesses wont ask you to send personal and account information over email.
Never send your passwords, social security number, or personal information in an email.
Imposter scams can rename their email addresses to look like legitimate senders.
Look at the actual address, instead of the name.
Dont ever enter information into a website that only starts with http secure websites starts with https.
Dont ever punch or download from the links in emails or texts asking you to verify information.
Are they really from a company that provided a service or product?
Is everything on the invoice a legitimate purchase?
Dont provide a credit card number for a free product.
Scammers often make offers that seem to be too good to be true.
They are too good to be true!
There are billions of scams happening every year, but most of them can be avoided.
A little bit of skepticism can save you hundreds of dollars.
The Penny Hoarder contributor JoEllen Schilke writes on lifestyle and culture topics.
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
