No business owner wants to give away their hard-earned profits, yet that’s exactly what’s happening to unwary small business operators around the country who have found themselves victims of scams.
According to data released by the Australian Competition and Consumer Commission (ACCC), small businesses have been scammed out of $2.2 million in the past six months.
Scammers are becoming increasingly sophisticated and will go to great lengths to con small business owners. So how are small businesses most commonly scammed, and how can you ensure your business doesn’t fall victim? Here are five tips to keep your business safe from the unscrupulous.
1. Carefully Assess Communications from Official Agencies
Scammers often send small business owners emails or letters that appear to be from an official agency.
Small businesses should carefully check communications from government departments, financial institutions and other such agencies. Scams often include email or postal addresses that are similar to, but not the same, as those from official agencies.
Scam communications may also make requests for personal or business details, or for ‘urgent’ payments – ensure such a request is 100% legitimate before providing information or making a payment.
If you’re unsure, phone the organisation and check the validity of the communication you have received.
2. Be on the Lookout for Fake Documents
Many scammers are successful because they create documentation that looks identical to an organisation’s official documents. Yet according to the ACCC, scam documents will often display clear signs they are fake – if you know what to look for. These include:
- A generic salutation, for example ‘Dear customer…’ instead of ‘Dear Greg Smith…’
- Use of a company name that doesn’t exist, for example ‘Australian Government Revenue Office’
- Poorly laid-out text and obvious manipulation of content
- Spelling and other grammatical errors
- An undue sense of urgency in the email subject line, in the heading on a letter or on the envelope
3. Carefully Check All Invoices Payable
Never pay invoices unless you are sure they are legitimate and that you have used the product or service listed on the invoice. Scammers often send small business owners invoices for services the business has not commissioned or used. Examples include invoices for advertising services or office supplies.
Ensure your accounting and filing systems are well organised and double-check every invoice payable. If necessary, introduce additional controls in your accounts department to ensure your employees don’t accidentally pay a false invoice. If you’re in doubt about the veracity of an invoice, do an online search of the business – you may find that no such company even exists.
Read: Unpaid invoices can be costly, tedious and frustrating, and damaging to the business or customer service relationship. Learn the easy way in following up on unpaid invoices.
4. Be Wary of Bank SMS Messages
Scammers are adept at using technology to hoodwink small business operators into financial scams. The Australian Communications and Media Authority (ACMA) issued a public warning about an SMS scam that appeared legitimate to many, but was in fact a scam designed to obtain customer bank account details.
Scammers sent SMS messages that masqueraded as respected financial institutions and contained links to URLs that looked similar to actual bank websites.
To avoid your business falling victim to such an SMS scam, carefully review any SMS you receive. Does it ask you to verify your identity? Banks and other financial institutions do not typically ask customers to prove their identity via SMS or email.
Also, make sure those who have access to your business bank account understand the risks associated with clicking on SMS messages claiming to be from a bank.
Many banks allow business owners to create additional logins for staff or accountants, which can help provide your business with additional protection from scammers.
5. Stay on Top of Scams
The government’s Scamwatch website helps individuals and small business owners stay one step ahead of scammers. You can visit the site to find out more about scams and also to register for regular email updates about the latest scams.
Staying on top of what scammers are doing can help ensure your small business never falls prey to their deceptions.