You often see news stories about individuals falling for Nigerian Prince emails or suspended Social Security phone calls and getting scammed. It’s tragic, but the news usually spins it into a feel-good story about how the community can come together and take care of one of their own. Then, they usually follow up with a few tips for others to avoid these scams.
While you don’t usually hear about scams affecting small businesses, the risk is there, and it can be even more devastating for these enterprises. What do you need to know to keep your business safe from scammers?
Understand Scammer Tactics
What sort of tactics do scammers use to insinuate themselves into your business? Here are a few:
- Exploiting trust: Scammers position themselves to appear as someone you should trust, whether that means being connected with a company you work with or a government agency.
- Creating urgency: They’ll try to pressure you into acting quickly, so you don’t have a chance to see through their scam.
- Using fear: Fear is one of their favorite tools. They’ll try to convince you something awful will happen if you don’t act quickly.
- Untraceable payments: Scammers will demand you use untraceable payment methods such as wire transfers. Once you send them, you can’t reverse or track them.
Identifying common scammer tactics is only one part of the puzzle, and this is by no means an exhaustive list.
Know Common Scams
Small businesses might not fall prey to the scams you hear about on the news, which just means scammers have to be clever when choosing their tactics. Instead of a threatening phone call stating your Social Security number is suspended, you’ll have individuals contacting you about supplies you didn’t order, or presenting you with fake invoices for services they never provided.
They also impersonate various officials as a tactic to insinuate themselves into your good graces. You’ll see scammers posing as everything from utility company workers to tech support professionals and even government agencies. If you ask for identification to validate their claims, they’ll become hostile or try to threaten you into doing what they want.
Anyone who uses a networked system or has a computer that connects to the internet is also at risk for phishing and ransomware scams that can steal their information or compromise their entire network. Knowing and understanding common small business scams is a valuable tool for protecting your company.
Train Your Employees
Unless you’re running a business entirely on your own, you aren’t the only person who might encounter a scammer. A company is only as strong as its weakest link, and it only takes one trusting soul to cost you a lot of money.
Offer comprehensive training for your employees on how to spot and avoid scams. The Federal Trade Commission (FTC) offers free training material you can order. Encourage active communication between employees. Train them to talk to one another if something seems suspicious. The first person might not spot the problem, but the second one might.
Avoid Relying on Caller ID
A decade ago, you could use caller ID to tell you who was on the other end of the phone before you ever picked up the receiver. Today, spoofers can make you see any numbers they want, so you have no idea who is calling or where they’re calling from. Don’t rely on caller ID as your first line of defense.
Scammers will often create a spoofed ID based on your area code, so it seems like they’re calling from your area when in reality they could be anywhere in the world.
Trust but Verify
The best thing you can teach your employees — and the best skill you can learn yourself — is to be skeptical of everything. “Trust but verify” should be your motto. Don’t take anything at face value, even if it takes a few extra minutes to check someone’s ID and place a phone call to ensure they are who they say they are.
Protect Your Business
Ultimately, it’s up to you and your team to keep your business safe from scammers that are getting smarter every year. “Trust but verify” is the most important concept to remember in safeguarding your investment.
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