BBB, FTC, police fight scammers targeting small biz

Better Business Bureau joined the Federal Trade Commission to undergo a study looking into scams that target small businesses. The report: “Scams and Your Small Business” found that these scams are growing, pose a significant risk to business owners, and generally result in a higher monetary loss per incident than those targeting individuals.

BBB Northwest + Pacific participated in the study by surveying thousands of small businesses in Alaska, Washington, Hawaii, Oregon, Idaho, Montana and Western Wyoming. The top five riskiest scams are bank/credit card company imposters, directory listing and advertising, fake invoice, fake check and tech support.

“Anyone could be a scammer’s next target,” said Chuck Harwood, director of the FTC’s Northwest Region Office.  “Small businesses are not immune from the threat, as the BBB’s new report shows, and the monetary loses may be sizable. Thanks to the team at BBB Northwest for calling attention to the harm that scams victimizing small businesses do to our regional economy, for encouraging a dialogue about prevention, and for supporting law enforcement actions such as those the FTC is announcing today.”

“We knew that we needed thorough research to fully understand the types of scams targeting our small businesses,” Tyler Andrew, CEO of BBB Northwest + Pacific said. “This study helps us to focus our fight against scammers by spotlighting how these con artists are tricking our businesses and how we can help minimize that impact.”

Here’s a closer look at the three top small business scams:

Bank / credit card imposter scams were the riskiest scams (based on our measurement tool based on exposure, susceptibility and monetary loss). Under the guise of verifying account information, scammers fool their targets into sharing credit card or banking information. Directory Listing and Advertising scams are the second riskiest scams for small businesses. As new businesses begin to grow their customer bases, they are looking for new ways to get the word out about their products and services. Scammers ask them to pay for an advertisement in a directory, or “Yellow Pages.” In some cases, the directory exists but is not widely distributed and therefore worthless. In other cases, the directory is a total fake and the ad is never placed anywhere. Fake check scams are the third riskiest and are used as a tactic for a variety of scams. Sometimes the check is a payment for products or services, but it’s an overpayment and the scammer asks the business to wire back the difference. In other cases, they ask the overpayment to be sent to a third party for taxes or to purchase supplies. In either case, businesses are asked to deposit a fake check and wire the difference. The business later learns that the check is fake after they’ve wired money to the scammer and the business is liable for the missing funds.

To protect your business, BBB recommends the following:

Train and inform your employees – discuss scams during team meetings, encourage employees to talk about it with their coworkers, train them on how to respond to random phone and email requests. Verify invoices and payments – Never pay until you’ve confirmed you actually received the goods or service; create clear procedures for approving invoices; make sure major spending can’t be triggered with an unexpected call, email or invoice. Be tech-savvy – Don’t believe your caller ID (they can fake this); it’s easy to create legitimate-looking websites and emails; don’t open attachments or download files from unexpected emails; secure your files, passwords and financial information. Know who you’re dealing with – do research on a new company before doing business; check BBB.org; ask for recommendations from other businesses.