We often hear about frauds targeting unsuspecting consumers; however, businesses are also frequently the target of fraudulent activity. As part of our mission to foster trust in the marketplace, we’re outlining common frauds against which you should guard your business.
Businesses are often solicited by organizations offering to include them in electronic directories for a fee. Fraudulent operations will send out invoices for directory advertising that wasn’t purchased, sometimes claiming that a business approved the listing previously. They may also attempt to record a phone conversation in which a business representative agrees to pay the invoice, then use the recording against the business owner when he or she has second thoughts.
Always crosscheck invoices before paying them, and don’t be afraid to ask for written documentation backing up claims that advertising was ordered.
Businesses may be asked for detailed financial information (including bank account numbers) in order to get lucrative work with a government department, or get contacted out of the blue by someone claiming to have a list of potential clients in the area and demanding a large fee for access.
BBB recommends being extremely cautious when asked for personal information about your company, and to consider carefully why that information would be needed. And always take the time to research solicitations before saying yes.
Other phone fraud
Business owners frequently report solicitations for doubtful charities, followed by an invoice. Other questionable calls include those saying there is a negative review on a website that companies have to create and pay for an account to access – even though no report exists.
Do some research, through BBB and online, about charities before you donate, and ask for written documentation that you can review. When solicitors use fear tactics, be extremely suspicious.
A business is told it is about to lose their domain name or use of their trademark on the internet – they need to renew and pay a fee.
Keep track of the service through which you registered your domain, and when the renewal will be coming up – if you’re solicited by a service you’ve never heard of, check it out before reacting.
Foreign banking and orders
A common email scam: a bank needs to involve you in transferring large amount out of their country, and offers a hefty percentage for your efforts. A little common sense and good hard thinking about the likelihood of this offer should tip you off to it not being legitimate.
Large orders from overseas can also be fraudulent, where a credit card is given for payment – after the order is shipped, the card turns out to be stolen or invalid. Crooks can use the TTY operator as a third party way of contacting a business for phony orders. Do your due diligence, and we wary when a deal seems too good to be true, or if the person placing the order seems completely disinterested in price, pressuring for a quick completion of the deal.
Corporate ID Theft
Criminals exploit a company’s name and credibility to get money from the public and can use forgeries of legitimate company cheques to increase trust in what is illegal activity. They can get money for loans, fake jobs, like mystery shopping, or send over-payment fake cheques to get money returned as per instructions to another address or more usually by wire transfer.
Keep a close eye on your corporate profile online, and your credit report; investigate suspicious activity.
This is usually toner and paper, but can be light bulbs and cleaners, whatever the target company usually orders in bulk. Someone calls, maybe with a survey or a confirmation of an order from their usual supplier, and gets the name of an employee, then sends cheap and inferior goods to that person as the one who gave authorization, and refuses to accept returns.
Train your staff so that employees who are not authorized to order supplies and services refer such sales people to the purchasing department. Require that all sales pitches be made in writing, and keep a list of regularly used vendors.
Check with your BBB if a suspicious offer or invoice comes your way - our trained consultants can offer sage advice on how to tell what's legitimate, and what's not.