Scams and frauds that every entrepreneur should avoid

Scams and frauds that every entrepreneur should avoid

The amazing world of entrepreneurship is not the utopia that many think. Contrary to popular belief being an entrepreneur is more about taking risks, facing challenges, and worrying about everything, especially scams. Of course, this has its own benefits, but the cost can be high; jumping into this world is for brave people. Today we are going to show you how to avoid scams and frauds. Keep reading!

Read: Tax Season 2021: You still have time!

Most common business scams

If you as an entrepreneur are afraid of being a target, don’t despair; many of the people involved in those scams and frauds tend to use the same tactics. For that reason, identifying them is not hard. But you must be aware of what is surrounding you and your business to prevent a situation like this. Having a team of trusting people is a plus that obviously will help you. However, for now, check the list of commons scams!

  • Fake invoices: this is a classical move for scams and frauds for business and regular persons. Scammers create phony invoices about products or services that your company uses or wants, hoping the worker in charge of bills won’t notice the lie. Many of these invoices are for something critical, a reason to pay first and ask questions later, taking all the money. 
  • Unordered Office Supplies and Other Products: this is pretty simple. Someone calls your business to confirm an existing order for products, verify the address, and offer a free catalog or another sample. Days later, at your door, you find those products that the business actually didn’t order and started a high-pressured demand to pay for them. But keep in mind if you receive products that the company didn’t contain, you have legal rights to support them. 
  • Directory Listing and Advertising Scams: with this, the scammers fool you to give information for a fake listing or directory or even confirm the data for an existing order in another. After that, you get a big bill, and they can even threaten you with a recording of the call to pay the bill.
  • Utility Company Imposter Scams: here, they use common services like gas, water, and electricity, pretending to be someone from those companies and urgently talking about a late bill that must be paid right now or the services will be suspended. Normally this occurs in a rush hour, for example, a dinner time in a restaurant. 
  • Government Agency Imposter Scams: imposters call pretending to be personnel from different government agencies, threatening to suspend important matters like licenses, patents, impose fines, demanding taxes payments, including legal actions with this. For any entrepreneur, this is an important subject that impulses them to quickly pay any sum. There are many ways to do this scam. For that reason, be very careful with any call from the government. 
  • Tech Support Scams: this is very dangerous because they can use email or pop-ups directly on any device to talk about a problem with the system, making you pay for a service to “fix” an invented problem. You cannot only lose the money, but they can also even have access to your files, passwords, and any delicate information.
  • Social Engineering, Phishing, and Ransomware: this is more about cyber scams, which have become the norm nowadays. The people behind this pretend to be a supervisor or any higher employee and attack a worker through email, calls, or social media ask or threatening them to give important information from the business or even personal one. There are also emails asking for an update on passwords and other programs that ending provided then through malware access to the computer and the entire business system. 
  • Business Promotion and Coaching Scams: here, the entrepreneur is tracking into a false coaching program for the business or the team, or in other cases to help with the marketing aspect of the company, but in reality, they just want your money and even can leave you with tons of debts. Be very careful with these scams because they look very realistic and convincing, trust only real organizations and agencies, research with fellow entrepreneurs. 
  • Changing Online Reviews: here, the scammers swore that they can change the negative reviews online that the business is getting, but first, publishing fake reviews is illegal. The Federal Trade Commission’s guidelines state that any endorsement, including reviews, must reflect the endorser’s honest opinion.
  • Credit Card Processing and Equipment Leasing Scams: in this, the scammer takes advantage of those businesses that are desperate to reduce costs, sometimes cheaper means trouble. The pressure the owner to sign a series of documents that are full of fine print, half-truths, and flat-out lies. With any form, you must be very careful. The first several copies must be done. Second, you must read the entire text, and ask if something doesn’t look good, and try to have a legal person with you. Trust us, a lawyer can do wonders when contracts or any form of the document is involved. 

These are the mus commons scams, but there are many more, and normally, they tend to be so subtle that you cannot note them. But this takes us to the next point.

How to avoid scams?

As we stated above, the tactics used by them can be so subtle that it has become like a game to the scammers that make you fall into the trap. For that reason, follow this advice:

  • Train Your Employees: you trust your team, right? They also need to be protected against any form of scam, ask them to be very wary of any strange thing that can happen during the process, or notice someone acting strangely around the business. 
  • Verify Invoices and Payments: this is very important. Normally the invoices have a very specific way to solicit different information, and it is like a golden rule. They will never ask for very delicate information. Besides that, try that the people dealing with the invoices remain the same, to make them familiar with those services. 
  • Be Tech-Savvy: technology is a must nowadays, but it can also be dangerous territory, especially if you don’t like it. Try to keep all the delicate and important information under security programs, and try to have the best digital security around the business process, moreover those involving money. Don’t trust caller IDs or email addresses. They can trick you easily, and that also can be the same for social media. 
  • Know Who You’re Dealing With: this can be applied to other companies or services that your entrepreneurship will need. Before closing the deal, research the brand, ask for opinions online and among your peers within your area, trust us they know, and recommend many services for you and your business that will never be a scam. 

These are just the tip of the iceberg. There are many things to check about scams and frauds. You can contact the FTC for more information. Check this link. Keep in touch with the magazine for more details!

How to identify business scams.

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Estefany Vasquez