Small businesses lose more than $7 billion a year to scams, BBB finds. Common dangers include scammers who impersonate the IRS or a bank, send fake invoices, or sell nonexistent advertising or directory listings, experts say.
Small businesses lose more than $7 billion annually to scams, according to a recent report from the Better Business Bureau.
Top scams highlighted in the report include those involving a bank or credit card company impostor, a fake invoice or supplier bill, tech support, a directory listing or advertising.
Often, small businesses can be the low-hanging fruit, so it’s critical to educate employees and establish internal controls to avoid falling prey to scammers.
“Businesses need to be proactive and learn about the most common scams and how they operate and how to prevent them,” says Claire Rosenzweig, president of the Better Business Bureau of Metropolitan New York.
Teach employees what to look out for and how to respond, she says.
For example, scammers exploit the full range of communication channels to make contact with their targets, the report found, but the phone is the top means of contact for business scams, says Rosenzweig.
This can be a problem because while consumers are routinely advised not to answer calls from unknown numbers, businesses probably answer their phones whether they recognize the number or not, figuring callers could be clients or new customers, according to the BBB.
Among the best-known scams:
- Tech support (scammers pretend to be from a well-known company claiming they can fix your computer or provide ongoing computer maintenance)
- Government agency impostor (scammers impersonating government agents make threats)
- Directory listing and advertising (businesses are fooled into paying for nonexistent advertising or listings)
- Fake checks (the victim company receives a bogus check for goods delivered)
- Bank/credit card company impostor (scammers impersonate a bank or other credit card issuer)