Simple Steps Your Business Can Take to Outsmart Scammers and Avoid Being a Target for Fraud
An email from “the Financial Minister of Nigeria” may be easy to write off as a fraud, but not all scams are so obvious. Today’s scammers are clever and the money they steal is no joke. In 2019 alone, Canadians lost nearly $100 million to fraud.
The Canadian Anti-Fraud Centre lists over 16 types of scams that target businesses specifically. Your business may present a tempting target to scammers, but there are ways to minimize the risk.
The first step to identifying a business scam is becoming familiar with scam tactics. There are as many scams as there are dishonest people, but their tactics generally follow the same patterns:
- Pretending to be an individual or business you trust
- Creating a sense of urgency
- Applying fear tactics
- Using untraceable payment methods
Calls and emails that seem to be from trusted sources, but leave you feeling rushed, worried and/or suddenly demand a new payment method should definitely raise red flags – no matter how compelling the reasons.
Common Business Scams
This is by no means an exhaustive list, but these represent the most common forms that business fraud takes.
- Fake invoices
Scammers pretend to be a supplier you (might) already use and send fake invoices for goods or services.
- Advertising scams
Scammers try to sell you spots in a nonexistent (or legitimate, but free) directory or get you to buy into advertising campaigns that never materialize.
- Tech support scams
Posing as tech-support, scammers try to convince you that your computer has a virus or is malfunctioning in some way and will ask for money or passwords to fix it.
- Imposter scams – government agency, utility company, etc…
As in tech-support scams, the con artist will pose as a trusted business or government agency and tell you your service is about to be interrupted or licenses are about to expire.
- Phishing, social engineering and ransomware
Online scammers use email, social media and even phone calls to trick your employees into providing sensitive information. Other emails may look like routine password update requests or software downloads. If answered, these tactics can steal information or install malware to lock your company’s files until you pay up.
- Too good to be true credit card and lending rates
Promising impossible rates for processing credit card transactions or bargain basement equipment leases, these con artists resort to fine print, bait and switch, and other lies to get you to sign a contract. Sometimes even asking you to sign documents with important terms left blank. Don’t be fooled. Suddenly, you will find yourself in a deluge of hidden “additional” fees, application fees, and other money-sucking terms. If a salesperson won’t give you copies of all documents right away, or tries to avoid it by promising to send them later, it’s a good sign you’re dealing with a scammer.
How to Protect Your Business
- Train Your Employees to Spot Scams
If you’re reading this article you are already doing the first step. Raising awareness. Make sure your employees also have access to this information and are aware of common scams perpetrated against businesses like yours.
Establish basic safety protocols for your team– like not sending passwords or sensitive information via email. And make sure they know you will never ask for that information through unsecure channels.
- Double-Check Invoices and Payments
Verify all invoices to ensure that items or services were actually delivered and that the invoice is from the correct company. If you suspect anything, contact the invoicing business directly to inquire.
How you pay is equally important. Very few (if any) legitimate businesses will ask you to pay by wire transfer, reloadable card, cryptocurrency, or gift card.
Limiting the number of people who can approve and pay invoices is another good way to make sure that unexpected calls and emails don’t lead to expensive mistakes.
- Be (Somewhat) Tech-Savvy
You don’t have to wear a pocket protector, but you should know the basics of how online scammers operate. Remember things like caller ID, email addresses and websites addresses are possible for scammers to fake. Even social media accounts can be hacked. Don’t open attachments or download files unless you’re sure the source is legitimate.
It may seem obvious, but take steps to secure your companies files, financial information and passwords. Too many businesses wait until after a damaging data breach to lock things down. Be proactive and do it now. For further information check out the Canadian government’s resource page at getcybersafe.gc.ca.
- Do Your Research
Before you do business with a new company, do some basic research. An online search of the company’s name and the term “scam” is a good place to start. Check and see if they have a BBB listing. What do their Google reviews look like? One or two complaints are probably nothing to worry about, but a pattern of complaints should raise red flags. Your safest bet? Ask your business associates for recommendations of companies they have used and trust.
Business fraud won’t be going away anytime soon. However, by taking reasonable precautions you make business much less of a target. Secure your sensitive information, double check sources, implement security protocols, only use traceable payment methods and do your research before you click or buy.
Safe, Reliable Equipment Leasing
Yes, there are bad guys out there, but you don’t have to do business with them. In fact, equipment leasing done right can actually offer your business an added layer of protection against scammers. We perform lien checks on any equipment leased through us and our trained staff has the background to know when things aren’t looking right. We take care of the exchange, so you aren’t risking your business’s money with an unknown third party. Thomcat Leasing has been providing personal, affordable equipment leases to Canadian small businesses for almost 30 years. Our reputation for low rates and great service is well earned.
Get your free no-obligation 60-second lease estimate, and see for yourself how equipment leasing can take your business to the next level.