Small Businesses are Common Scam Targets

If you have an email address chances are you’ve been exposed to some sort of fraud or another. Nearly everyone has been sent an email informing them of an international lottery they have won and all they need do is send a small deposit and the winnings will follow. A personal favorite of mine was a marriage proposal from a Baharanian princess that needed money to escape her tyrant of a father. Although most cons are appeals to greed it was pleasant to see one that was an appeal to a misguided knight errant sense of romance.

It is easy to think of fraudulent activity as all being aimed at consumers but the Better Business Bureau thinks differently. They have warned new and small businesses that they are commonly targeted by criminals and have made an effort to educate them about the nature of these attempts.

Let’s take a look at those aimed at new businesses first. The BBB warns people looking to start a new business to avoid work at home schemes. Usually an add will promise exceptionally high pay for some sort of business involving a simple task such as envelope stuffing, medical billing, or discount coupon mailings. Normally these scams require an upfront expenditure to get started.

They also warn us to avoid pyramid schemes. A pyramid scheme is any program that involves selling a product or service but the real funding comes from selling memberships in the program to other potential businesses. Funds collected from new members are used to pay older members but inevitably these schemes collapse and the most recent members money is simply gone.

The third type of new businesses to avoid is business plans that are promoted at seminars. The Bureau warns that promoters of risky or fraudulent business opportunities draw in prospects through seminars that promise to teach anyone how to make unrealistically large returns of money. You have to ask yourself if the business idea is such a good one why are its promoters making their money by pitching it to you rather than pursuing it themselves.

Now, let’s take a look at some of the scams aimed at taking advantage of existing businesses. It is a common practice for thieves to send fake invoices for products or services that the targeted business did not order in hopes that it will simply be paid without question. They count on accounts payable clerks who are too busy to examine every wholesaler’s invoice. Often these fake invoices are for office supplies or yellow pages ads. Make sure you examine every bill your company gets carefully and never pay anything your unsure of.

Another tactic of frauds is to promise some sort of free product or service in exchange for financial information about your company or for you downloading some kind of software onto your business computers. The promised item never arrives but instead charges appear on your credit cards, on your bank account, or phone bill.

The Better Business Bureau offers a number of guidelines to help avoid having your business fall victim to scam artists. The first and most basic is common sense; if an offer sounds too good to be true it probably is. This notion appears simple but when considering an investment or expenditure the small businessperson is advised to repeat it over and over to him or herself.

Get everything promised by a business offer in writing. No reputable salesperson should ever refuse this request. If they won’t do it you probably don’t want what they are selling. Ask for references and check them. It’s very easy for a scammer to give fake positive references.

Be sure you understand all documents you are asked to sign and never sign any contract with blank spaces on it. The BBB puts it very well when they say if you cannot explain an agreement to someone else you don’t understand it. Seek a lawyer’s aid if you cannot understand a contract.

Finally be sure to report any suspicious business activities to the BBB, your state attorney general’s office, or the Federal Trade Commission.

If small businesses refuse to allow frauds to get away with it and report the attempt to defraud them it will make the business world safer and more profitable for everyone, everyone but the thieves.