7 Ways to Avoid Business Scams
In addition to the many challenges of running a business, scammers present a growing (and formidable) risk.
Reports from government agencies show they’re having a hard time protecting businesses from scammers. For example, Australia’s investment watchdog - the Australian Securities and Investment Commission (ASIC) - recently claimed to be taking down roughly 20 scam sites each day!
What can business leaders do to counter this threat? First, let’s look at some typical examples of scams.
Phishing
Phishing occurs when scammers impersonate government agencies or large organisations like banks to trick business owners into revealing sensitive information. This can happen over email or text, and the recipient usually clicks a malicious link that seems legitimate. The fraudsters often prey on fears and uncertainty, sending out fake updates about safety measures or offering access to supposed government subsidies.
Compromised email accounts
Email phishing becomes more complicated when hackers access legitimate email accounts and send links or fraudulent payment requests. These emails are especially dangerous because they’re hard to distinguish from legitimate correspondence.
False billing
In this case, scammers send fake invoices, hoping busy administrators won’t notice they’re fake. Small businesses face significant risk, especially where one fraudulent payment could significantly impact cash flow.
Supply scams
Scammers can set up fake websites or social pages and sell nonexistent products. Buyers seeking something urgently or that they think is scarce are particularly prone to this scam.
Overpayment scams
More rare, perhaps, but this involves scammers overpaying for goods using stolen credit cards or fake cheques. Then they request a refund for the excess and once the original payment fails, the business is left with the bill.
So what can businesses do about scams?
Here are 7 best practices:
- Recognise that any person or business is a target. Scams are not only directed at small, unsophisticated businesses. Many vigilant, tech-savvy people have fallen victim. And the techniques of scammers continue to evolve.
- Create a culture of suspicion: Verify the source of emails, SMS or social media messages before responding or clicking on links, especially where sensitive information is involved. Be doubly suspicious where the sender implies urgency, a common technique of scammers.
- Train your employees to recognise and report suspicious activity. Anyone can be targeted.
- Double-check payment requests, especially those involving new bank details. Set up processes which require multiple steps or involvement by multiple people before payments are executed.
- Strengthen password policies because weak passwords are a common entry point for scammers. Make sure all business accounts have strong, unique passwords that change regularly.
- Update software because outdated systems are an easier target for scammers, especially those engaging in phishing attacks.
- Online monitoring tools like Google Alerts can reveal unauthorised use of the business name online. Scammers often misuse legitimate business names to seem credible to other victims.
With no end to the threat of scammers in sight, it’s prudent for leaders to be ultra-cautious and adopt strategies like those mentioned above.
What should you be doing to protect your business from scammers?
Need help reducing business risk? Contact the team at Alliott NZ in Newmarket Auckland for help managing your business or planning in this new financial year.
