A nonprofit publication of the Kentucky Center for Public Service Journalism

BBB Trends: Small businesses are a big target of scams; how to proactively help yourself

By Sandra Guile
Better Business Bureau

Millions of people in the United States either own or work at a small business, putting in a decent amount of time, money, and sweat into their jobs. Where most people would value small business for the community they create, scammers see a chance to cash in. It’s reported that scammers steal approximately $7 billion per year from small companies. BBB and FTC have published a “Scams and Your Small Business” research report, detailing the overall effect of some of the most common schemes on small businesses.

It Can’t Happen To My Business

After surveying 1,200 small businesses nationwide, eight out of 10 small business owners believe that other businesses besides their own are more at risk of scams than their own. Yet, 63 percent of the respondents that were surveyed were aware of being exposed to a scam in the past three years and at least 13 percent indicated that they were victims.

When it comes to swindling cash, stealing identities, or creating bogus websites, scammers use a wide range of tactics from low to high-tech. They may pretend to be someone the business would trust, they might pretend to be Internet service provider to appear credible, or they could pressure the owner to make a hasty decision instead of thinking it through. Sometimes, scammers even sneak into the company’s computer system and stay there for months.

The most common scams that target small businesses are phone calls from alleged tech support companies, threats from a government agency such as the IRS, directory and advertising companies, fake check scams and bank/credit card company imposters. In each of these scams, the most common form of payment requested is typically credit card, check, or wire transfer.

What Can I Do As a Small Business Owner?

Being proactive can help prevent an owner from falling victim to fraud. This can be difficult to do because small businesses face urgent requests since they’re typically understaffed and are constantly reshuffling daily priorities to meet their customers’ needs.

It’s important to train staff members to detect and avoid scams by helping them to understand the persuasion tactics a scammer will use to coerce personal information or payment from the person that answers the phone. Another measure is to limit the number of people in the office authorized to pay invoices or place orders on behalf of the business. Doing this will reduce the question of whether or not a bill has been paid and if it was paid on time. As a manager or owner, it could be a good idea to talk about the different scams affecting small businesses, sharing the information in employee meetings and discussing having a clear policy in place on how to handle a situation if something seems suspicious.

Need Help? Resources are Available

Based on the Scams and Your Small Business report, 43 percent of small businesses surveyed believed they’ll become a target of a scam in the next year. BBB has tips and resources available for business owners to report these incidents by using Scam Tracker, a tool that collects and presents data in a searchable online heat map that shows users what’s occurring in their neighborhood. This data is then used by state, local, and federal law enforcement authorities for investigative purposes.

The Federal Trade Commission has several blogs and scam alerts available on ftc.gov/smallbusiness. A full copy of the “Scams and Your Small Business” research report is available for download.

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