How to Protect Your Small Business From Scams

by | Dec 16, 2022 | Business Line of Credit, Resources, Small Business, Technology | 0 comments

How to Protect Your Small Business From Scams

If you own a small business, you spend a lot of time and effort ensuring the company runs smoothly. But when scammers go after your business, it can hurt your reputation and your bottom line. Your best protection? Learn the signs of small business scams. Then tell your employees and colleagues what to look for so they can avoid scams.

Here are ways you can help spot and prevent fraud, according to the Federal Trade Commission.

Scammers’ Tactics

  • Scammers pretend to be someone you trust. They make themselves seem believable by pretending to be connected with a company you know or a government agency.
  • Scammers create a sense of urgency. They rush you into making a quick decision before you look into it.
  • Scammers use intimidation and fear. They tell you that something terrible is about to happen to get you to send a payment before you have a chance to check out their claims.
  • Scammers use untraceable payment methods. They often want payment through wire transfers, reloadable cards, or gift cards that are nearly impossible to reverse or track.

How Can I Protect My Business from Scams?

Train Your Employees

  • Your best defense is an informed workforce. Explain to your staff how scams happen and share this brochure with them. Order free copies at FTC.gov/Bulkorder.
  • Encourage people to talk with their coworkers if they spot a business scam. Scammers often target multiple people in an organization, so an alert from one employee about a scam can help prevent others from being deceived.
  • Train employees not to send passwords or sensitive information by email, even if the email seems to come from a manager. Then stick with the program — don’t ever ask for sensitive data from employees by email.

Verify Invoices and Payments

  • Check all invoices closely. Never pay unless you know the bill is for items that were actually ordered and delivered. Tell your staff to do the same.
  • Make sure procedures are clear for approving invoices or expenditures. To reduce the risk of a costly mistake, limit the number of people who are authorized to place orders and pay invoices. Review your procedures to make sure major spending can’t be triggered by an unexpected call, email, or invoice.
  • Pay attention to how someone asks you to pay. Tell your staff to do the same. If you are asked to pay with a wire transfer, reloadable card, or gift card, you can bet it’s a scam.

Be Tech-Savvy

  • Don’t believe your caller ID. Imposters often fake caller ID information, so you’ll be more likely to believe them when they claim to be a government agency or a vendor you trust.
  • Remember that email addresses and websites that look legitimate are easy for scammers to fake. Stop and think about whether it could be a scam before you click. Scammers even can hack into the social media accounts of people you trust and send you messages that appear to be from them. Don’t open attachments or download files from unexpected emails; they may have viruses that can harm your computer.
  • Secure your organization’s files, passwords, and financial information. For more information about protecting your small business or non-profit organization’s computer system, check out the FTC’s Small Business Computer Security Basics.

Know Who You’re Dealing With

  • Before doing business with a new company, search the company’s name online with the term “scam” or “complaint.” Read what others are saying about that company.
  • When it comes to products and services for your business, ask for recommendations from other business owners in your community. Positive word-of-mouth from trustworthy people is more reliable than any sales pitch.
  • Don’t pay for “free” information. You may be able to get truly free business development advice and counseling through programs like SCORE.org.

Making sure that your business is secure from scams is one of the most important things you can do to ensure your company’s longevity. If you need funds to implement strong security measures, we can help. First Union has helped businesses get money in as little as two days through our wide array of loan programs. Call today, and let’s get started!