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Entrepreneurs should pay attention to these top 10 scams
that targets their small businesses.
They include:
1. Fake
Government Grants
2. Going Green
3. Tax and Bank
Fee Refund
4. Smartphone
download
5. Phantom
Investors
6. False
Invoices
7. Over-payment
8. Credit Card
9. Work from
Home
10. Money Transfer
How do these scams work?
1. Fake
Government Grants: You search the web to find a grant
for your small business and you get spot one that’s just
right for you.
They offer to give you the grant without much paperwork, but
you have to make a down payment.
You should not have to make down payments to get a
grant.
Government Grants require that you go through a lengthy
application process.
Use legitimate government website when seeking
government grants.
If seeking private grants do the research on the
organization offering the grant.
2. Going
Green: When
the government offers rebates as incentives for
organizations to use energy savings equipment scammers take
advantage of this by offering their own fake rebates on
useless equipment.
Do your homework and stick to respected brand names.
3. Tax
Refund: If
you’re owed money by the IRS after filing your taxes, they
will not call you up and ask for you bank information so
that they could transfer the money to you.
You have already provided that information when you
filed your taxes.
If you get such a call it is a fraud.
Hang up.
4.
Smart Phone Download:
Malicious spyware, in the form of a game or other
app, is promoted to users, who then download it. The malware
then proceeds to harvest information from the smartphone,
such as financial details.
Have a policy that dictates to your employees what
kind of apps they can or can’t download on their devices.
Have a system in place to verify that an app is
secure before authorizing it for use.
5.
Phantom Investor:
Phantom investors contact you presenting themselves
as an agent representing someone who wants to invest in your
company. But
first, you have to qualify.
In order to qualify, you have to pay for required
documentation such as non-disclosure agreements, financial
audits, etc.
After they've collected your payment for the documentation
they disappear, and you have no investor.
If someone wants to invest in your business meet them
in person.
Don't go through a 3rd party.
Do your due diligence and check on their background
and history.
6.
False Invoices:
It’s common for small businesses to get an invoice in
the mail asking them to pay for ads in newspapers that
they’ve never requested.
When you see one of these invoices ignore it.
Do not pay it.
7.
Overpayment:
This usually occur when a customer pays you with a
check, but in an amount over the stated price for the
product. Before
you’ve had a chance to deposit the check, they would ask you
for a refund of the overpaid amount in cash.
You pay the difference in cash then deposit the check
and find out that the check bounced.
The loss is yours.
Avoid check payments and use cash or credit card
payments.
8. Credit
Card: There
are a few ways you could be defrauded with credit card
frauds. One of
the common ways is to lure you to a fraudulent website,
which obtains your credit information under false pretenses,
and uses it to make purchases.
Have stated policies about which sites your business
is authorized to use credit cards at.
9. Work from
Home: Work
from home scams usually involves scammers asking people who
want to start their own business working from home to pay
upfront fees in order to get the startup kit and linked to
the organization you’ll be doing the work for.
Once you pay the
fees you never hear from them again.
No Work from Home opportunity should ever require you
to pay any upfront fees.
Avoid them.
10.
Money Transfer:
If you get an offer to transfer large sums of money
on some else’s behalf in return for a nice fee (usually a
percentage of the transferred amount) say no.
This scam requires you to provide details about your
bank account which the scammer then uses to withdraw money
from your account.
These are
reporting agencies you should utilize if your business
becomes the victim of a scam.
Learn more about scams.
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