7 Scams that Target Small Businesses

Jul 18, 2011 | Business

We hear a lot about identity theft and scams against individuals, but did you know that scams targeting small businesses are on the rise? Fraud can cause financial strain on a small business as well as damage your hard earned reputation. The Better Business Bureau recommends that you train your staff to keep an eye out for common scams.

"Every year the BBB receives thousands of complaints from small business owners who fell for an invoicing scam or were misled into paying for products and services they didn’t want. Scammers aren’t always trying to steal money from a business; sometimes they are after a company’s financial or customer data and will use many kinds of high and low-tech methods for getting it."

“Small business fraud can come from internal threats, such as employee fraud, or from external full-time scammers,” said Alison Southwick, BBB spokesperson. “Because small business owners often lack the time and resources to fight fraud, they are a popular mark for any number of different scams.”

Here is a list of 7 Scams That Target Small Businesses recently published by the Better Business Bureau.



Directory Scam

Scammers will call your business claiming they need to update your company's information in their online directory and might even lie about being with the Yellow Pages. Then your business is billed hundreds of dollars for listing services you never agreed to or for ads you thought you were placing in the Yellow Pages.


Office Supply Scam

Some scammers hope you won't notice a bill for office supplies like toner or paper which you never ordered. BBB receives thousands of complaints from small business owners who were deceived by office supply companies and billed for products they didn't want.


Overpayment Scam

Be cautious of a customer who presents a check or money order in an amount more than is owed for product or services and then asks you to wire the extra money back to them. This scam not only targets small businesses, but consumers selling everyday items on eBay, Craigslist, etc. have also fallen victim to this.


Data Breach

Whether it's the result of a hacker or an employee selling your customer's information, a data breach is a possibility regardless of how secure you think your system is. This can have a severe impact on your business as well as your customers. The BBB provides Data Security – Made Simpler, a free service that provides information on how to protect yourself.


Vanity Award

If you are approached about receiving a business or leadership award, be sure to do your research on the company presenting it. While flattering as it might be to finally be recognized for all your hard work, you don't usually have to pay for it.


Stolen Identity

Scammers will often use your company's name for the purpose of ripping customers off. You won't necessarily lose any money in this type of scam, but your reputation would be tarnished as angry customers think your company is responsible.


Phishing eMails

You as a business owner receive an email pretending to be from the IRS claiming your business is being audited or from the BBB saying your company has received a complaint. Do not click on any links or open any attachments if you happen to receive such communications. Contact the agency directly to confirm the legitimacy of the claims.

Of course these scams won't cause you to lose everything all at once, but little things add up over time. You don't want to lose what you've been working so hard for. Do your research before making any business decisions!