Investigating contact, inspecting invoices, and creating a trusted email list are some tips for small businesses to avoid potential scams.
October is Small Business Month and the Better Business Bureau (BBB), serving Mainland BC, wants to help your business thrive and keep it safe from business scams.
Small Business Month celebrates the contributions that small businesses make to our local communities.
Throughout the year, BBB celebrates its community of trusted businesses (predominantly small) that have been vetted and vetted to enable them to show the sign of a Better Business. Through supporting our accredited businesses, BBB sets standards for business performance, celebrates role models in the marketplace, engages and educates consumers and businesses, and exposes poor behavior in the marketplace, such as scams and fraud. Our mission is to promote trust in the market, something that can only be achieved by working in partnership with large companies.
Additionally, BBB aims to support small businesses in communities throughout North America by providing them information and advice to avoid scams and scammers.
“It’s the time of year when small businesses should be celebrated, not ripped off,” said Neesha Hothi, spokesperson for BBB Mainland BC and the Yukon Territory.
“Unfortunately, scammers don’t take time off and can often try to take advantage of special occasions or moments of celebration. “They hope companies are so caught up in the sentiment that they miss the warning signs.”
Here are the top three scams that the BBB says target businesses, as well as five tips on how to avoid them.
Scams
Brand Phishing Scams
Your company receives an email stating that your trademark is at risk of being stolen and that the company contacting you can take care of all the necessary paperwork to ensure that doesn’t happen. They may even offer an offer on the price. Unfortunately, this company likely has no connection to the Canadian Intellectual Property Office (CIPO) and is looking to scare you into sending them money or personal information.
A company shared its experience with a brand phishing scam attempt by BBB Scam Tracker. Below is an excerpt from the scammers’ message to the company:
“Immediate action is crucial to protect your intellectual property rights and prevent any unauthorized use of your brand. We are prepared to quickly proceed to file your trademark application and oppose the applicant’s registration on your behalf. Please understand that once the applicant’s classes have been paid for with CIPO, our ability to intervene effectively will be limited.”
– Vancouver 2024 BBB Example
Fake invoice scam
Scammers create fake invoices that appear to be for products or services your business actually uses, perhaps office or cleaning supplies or domain name registrations. Scammers hope that the person responsible for paying the bills will assume they are legitimate and not look into them too much. Scammers know that when the bill is for something critical, like keeping your website up and running, you may pay first and ask questions later.
In April 2024, BBB received a scam report attempting to get a local business owner to submit an invoice for $278 to “renew their domain name and retain exclusive rights.” It was the second that the company had received so far and from then on it knew that it was a scam and it did not lose any money.
Advance payment loan scam
No matter how much you need a loan, don’t overlook this big red flag. Companies that supposedly “guarantee” loans without seeing your credit history are most likely scams. These scammers charge upfront fees to secure a loan, but once you hand over payment, the “lender” disappears and you never receive the money.
Advance installment loans are illegal in Canada, it is illegal for companies to promise a loan and demand payment before delivering. If you or your business need a loan, watch out for red flags, never send payment early, and turn to one of the many trusted professionals you can find on BBB.org.
Tips
- Research the company that contacts you
- Does the business have a good reputation? Can you find them online? Do they have a market history? Do they have a physical location you can visit? Be sure to check BBB.org for their contact information, complaint history, and customer reviews.
- Create a process to inspect invoices
- Always check that goods or services have been ordered and delivered/completed before paying an invoice. Designate a small group of employees with authority to approve purchases and pay invoices.
- Train employees to be critical thinkers
- Most business owners rely on employees to handle telephone inquiries. Take the initiative to train your staff so they are prepared to deal with suspicious people. Always encourage your team to ask questions and keep personal information private until the caller’s legitimacy can be verified. End the call immediately if threats have been made.
- Create a whitelist of trusted email addresses
- This ensures that emails from unknown addresses are blocked or flagged. This minimizes the risk of phishing or spoofed emails arriving. Likewise, never open emails, or click on attachments or links from an unknown address, as they may contain malware used to compromise accounts.
- Add two-factor authentication to your company logins
- Ensure all software, including antivirus software, is up to date on all computers, servers, and mobile devices used by the company. Make sure everyone in the company changes their passwords at least twice a year, especially when employees leave.