Insureon Blog

Small Business Scams Aren't All Online

3. February 2015 07:53

cat trying to steal a hunk of meat

Remember those spammy emails about a Nigerian prince in need of a little help, who would return your generosity a million fold once you just hand over your banking account number or make a quick wire transfer? It's a scam that actually dates back to the 18th Century, and in the world of fraud, it's called a "419 scam," named after an article in the Nigerian Criminal Code. This type of scam tricks the user into divulging private information in exchange for riches and other earthly spoils (or maybe the altruism of helping out princes?).

Thanks to the knowledge machine that is the Internet, most people know better than to fall for these blatant 419 scams anymore. But that doesn't mean scammers have packed up their letters and emails to turn over a new leaf. Alas, it seems our collective cunning has only made fraudsters more innovative.

While your small business may not have to worry about an employee falling for a Nigerian prince email, you do have to worry about phishing emails that trick users into thinking their boss is asking for their login credentials. And that's not all. Some old-school scams are still alive, well, and ripping off business owners today, even though you'd think such schemes are a thing of the past.

Small-Business Owners, Beware: Top 5 Analog Scams that Leave You Scrambling

According to the Federal Trade Commission, the following five scams can catch even a savvy small business off guard because most people are on the lookout for malware or spear phishing emails – or worse, they just don't have time to really pay attention to the warning signs. These cons prove that it doesn't take technological advancements to swindle a business:

  1. The Directory Listing Scam. You know it's an old-school scam when the crook is trying to get you to confirm your business's listing in a phone directory. Unfortunately, an employee might not know your business doesn't have a listing or has already updated it through the authentic channels. Your employee might mistakenly confirm or accept the listing, which prompts scammers to send you fake invoices for hundreds of dollars or make collection calls when you don't pay up. They may threaten to ruin your credit, which is a sore spot for many small-business owners.
  2. The Supply Swindle. If office supplies magically show up at your business's door, watch out before signing or paying for anything. Criminals like to capitalize on the assumption many employees make: someone in charge approved the order. But as soon as those supplies are accepted, the inflated bills and collection calls start rolling in.
  3. The URL Hustle. If you run an ecommerce business, your website is your bread and butter. And if that's the case, a notice that your URL has expired may be enough to make your blood run cold. This fraud involves a letter urging you to pay a URL renewal fee immediately. The hope is that you'll be too distraught to fact-check its origin. Call up your web-hosting company and confirm any changes through them.
  4. The Charity Con. Fraudsters are endlessly creative and perhaps more than a little amoral, if this scam is any indication. Like many other small-business owners, you probably participate in community events and charity opportunities. And a scammer takes advantage of your humanitarian streak by posing as a fake charity, requesting donations, and taking off with your money. To avoid these ploys, check out the FTC’s "Before Giving to a Charity" page.
  5. The Check Cheat. If you get an unexpected refund or rebate check, think twice (and read the fine print) before cashing it. By depositing the peculiar check, you may be agreeing to be billed monthly for some unnecessary service (e.g., a listing in an online directory).

Now that you're up to speed on these surprisingly resilient cons, why not brush up on common causes of data breaches? Read more in the post, "Top 8 Data Breach Misconceptions."


General | Risk Management | Small Business | Small Business Risk Management | Tips for All Small Businesses

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