Even in the middle of a pandemic, fraudsters are working hard to scam small businesses out of their money. Don’t think that just because your business is small doesn’t mean these scammers won’t be interested in you. In fact, you are their main target.
Needless to say, the last thing that business owners need is to become a victim of fraud. To keep your business safe from further adversity, here are the common scams that target small businesses and how you can avoid them.
Personal injury scams
Liability insurance provides coverage for business owners in case an individual gets injured on their business premises. However, some people see this as an opportunity to scam honest businesses with fake or exaggerated injury claims. And since we’re in the middle of a global crisis, desperate times call for desperate measures for many of these fraudsters.
Public health scams
The latest form of phishing involves fraudsters pretending to be public health organizations, such as the World Health Organization (WHO) or Centers For Disease Control and Prevention (CDC), asking businesses for confidential information (tax IDs, Social Security numbers, etc.) or directing them to click a link or download a file. Avoid getting your information stolen by instructing your staff not to engage with these e-mails, much less click links or download files.
The government has increased unemployment benefits to assist businesses that have been affected by the COVID-19 pandemic. For fraudsters, the improvement of these benefits is a potential gold mine, and they obtain information from businesses to file fraudulent unemployment claims under the name of the business.
Sadly, business owners only find out that they have been scammed when they receive a claim notification. That said, be wary of people trying to get your business or personal information, which can be through e-mail, phone calls, or even snail mail.
SBA loan scams
Many small business owners are turning to SBA loans to keep themselves afloat during this pandemic. Unfortunately, fraudsters have found a way to scam people through SBA loans, too. In a typical SBA loan scam, fraudsters demand an upfront fee from business owners trying to obtain a loan and claim that they need to pay to get approved quickly. Although this sounds much like a common scam, many small business owners still fall for it, sometimes due to desperation.
Now that you are aware of this type of scam, do not transact with “lenders” asking for an upfront fee. You don’t need to pay any amount of money to apply for an SBA loan, nor do you need to go through hell and back to get approved (some fraudsters deliberately make the process difficult to make you desperate enough to pay).
Government check scams
Government check scams are also a form of phishing. In this type of scam, fraudsters obtain information from business owners by pretending to be a government agency. Do not entertain calls or e-mails that ask you for your information in exchange for money. Furthermore, block their number or mark their e-mail as spam immediately.
In the face of crisis, many people work together to provide aid for those who need it. However, not all COVID-19 donation drives are genuine, and small business owners should think twice before donating to an unfamiliar organization.
If a charity or organization reaches out asking for donations for a pandemic-related cause, take the time to research their group before donating anything. If anything seems amiss (unregistered charity name, pressuring you to donate, difficult-to-trace payment methods), keep your money and donate it to a reliable organization instead.
The coronavirus pandemic has forced a lot of companies to shift to work-from-home setups. As if this is not a challenge in and of itself, this change has made it easier for fraudsters to commit I.T. scams, relying on the fact that employees are not used to this type of setup and that no face-to-face interactions are going on.
In a typical I.T. scam, a fraudster does a bit of research about the company’s organization, then calls or messages a member of that organization to obtain sensitive information while posing as another employee. You can avoid this scam by warning your people against this type of modus and strengthening your security systems until you can go back to the office.
Fraudsters target small businesses because they are more vulnerable, having fewer resources to protect their data and privacy. Nevertheless, small business owners can protect their business by being aware, educating staff about scams, and upping systems security as much as possible.