It’s an unfortunate truth that the rascally minded will always be among us. As if making a success of business wasn’t already difficult enough between market factors and regulatory obligations, there is also a small but dedicated sub-section of thieves, cheats and con-men who make their living by running corporate scams and taking advantage of hard working business properties. From the classic slip and side to cutting edge money transfer scams, we will now take a look at some common SME scams and how your business can identify and avoid them.
Business and Corporate Scams To Avoid
The Ole ‘Slip and Slide’
As you know, the US is very much a litigation culture and wherever there is pain or even mild annoyance along with blame there is often enough a corresponding claim and the slip and slide takes full advantage of this.
Basically the scam that an experienced scammer/stuntman engineers a fall at your business premises and seeks to claim damages from you. Of course, usually the injuries will be soft tissue ones that don’t show up on X-Rays and while you may not actually accept responsibility for the clumsiness of your patrons, defending the matter is usually simply not cost effective.
In order to protect yourself invest in CCTV, make sure all spillages and obstructions are cleaned up fast, and invest in good liability insurance.
Money Transfer Scams
This is by far one of the most frequent financial scams for businesses. In fact, did you know that an estimated 70% of businesses have been targeted by bank transfer scams? Bank transfer scams are simply ones where criminals attempt to deceive businesses in transferring them money on various grounds.
There are endless variations on this theme but popular ones include sending fake invoices (often presented as real ones from real suppliers) so keeping up with the latest trends and developments can be tough!
Phishing Trips (the Most Common SME Scam)
The most common of SME scams, Phishing is when a business employee receives an email from what appears to be a legitimate sender (often somebody already in their contacts) asking them to either click a link or complete an e-form that requests sensitive information such as bank account details. Once entered, the information is sent to the scammers who can then use it to try and hack bank accounts.
The best way to guard against this one is to ensure that all employees are aware of scams, and to be mindful whenever they release or key sensitive information. Also be sure to pay close attention to the sender’s email address as there is usually some form of tell.
Trojan Horse Scams
A variation on the phishing expedition is when the ‘fake email’ has an attachment that the scammer presses the recipient to open. However, opening the attachment unleashes a piece of malevolent software that will download itself onto the recipient’s manhine and seek to hide on your company’s network.
There are a few different kinds of trojan scam operating. Common ones include ‘ransomware’ where the scammer infects a network with a virus which they offer to remove for payment, or else the scammer simply uses the Trojan to gradually collect sensitive company data for possible future use.
The best ways to protect against this one is to have a strong firewall that vets all incoming emails, dedicated antivirus software (although then again, there is a whole cottage industry of McAfee scams) and to coach your staff to be wary when opening attachments
‘Final Warning’ Scams
This common scam consists of a fraudster calling your company claiming to be from a utility company (usually either electricity or internet) and advising that you have failed to pay our bill and are about to be disconnected unless you pay in full, right now.
The scam relies on businesses panicking, and deciding to make the payment ‘while looking into the matter’ even though they know they in fact paid.
In reality, disconnecting utilities is never quite so straightforward a real supplier will never call on “pay or else terms” like this.
In Summary: Financial Scams For Businesses To Avoid
Now that you have seen these common SME scams for yourself, you will hopefully feel better prepared to avoid them. Sadly, the dishonest will never run out of new ways to cheat and new money transfer scams, liability schemes and corporate scams will always be a reality of doing business. Still, you can guard against most of these financial scams for businesses by implementing some best practices and by ensuring that your employees remain vigilant.
