The internet has opened doors enabling businesses of all shapes and sizes to reach customers all over the world.
Whether consumers are seeking medical help, legal assistance, mentorship, or products, it no longer matters where they are physically located due to the rise of online businesses and services.
Yet, doing business on the internet comes with its shared set of risks for business owners.
Let's take a look at some common scams business owners can face and tips on how to avoid getting scammed when doing business on the internet.
Common Internet Scams Business Owners Face
Scam artists use a number of different techniques and tactics to target businesses to pay for services never performed or for products never delivered.
Business identity theft - Occurs when someone pretends to be a decisionmaker at a company, makes purchases, or takes on debt that the true business owner eventually has to pay for.
Imposter scams - Instead of pretending to be the business owner, this scam occurs when someone calls pretending to be from a government agency, like the Small Business Administration (SBA), or other trusted entity and requests sensitive information about a business.
Business lending scams - Many business owners turn to business loans and other ways to secure financing (revolving lines of credit, revenue based financing, credit cards, etc.) in order to start their business. Scammers take advantage of business owners by offering overly gracious terms such as outstanding rates and paying upfront fees. Scammers promptly pocket this money and disappear, leaving business owners high and dry.
Fake Invoices and Unordered Merchandise - Business owners and customers alike can fall for this scam where scammers create phony invoices that look like ordered products or services for your business. Additionally, be wary of anyone calling to “confirm” an existing order, “verify” an address, or offering “free” samples.
Email Compromise, Phishing, and Ransomware - Email phishing plagues business owners when they are subject to scammers sending phishing emails that often look like routine password update requests or offers on a business deal from trusted sources. In both of these scenarios, business owners end up giving up confidential or sensitive information such as passwords or bank information. Scammers will also use ransomware to lock or encrypt files on a business's electronic devices and then demand a ransom in order to remove it.
Three Ways to Avoid Getting Scammed on the Internet
Now that you are more familiar with scammer's tactics, here are three ways to avoid them altogether.
Know an imposter when you see one
Pay attention to who is sending the email or calling you requesting for money. Listen to how they ask you to pay and never send money to anyone you don't know who demands you to pay with a wire transfer, cryptocurrency, or gift cards.
Additionally, always check the email address or URL of the website to ensure it matches that of the actual person or business you are interacting with. SSL certificates are also great indicators that the data you transmit is secure and encrypted.
Protect devices, files, and networks
Businesses should conduct internal audits of their devices and the practices their employees engage in to fend off attempted scams.
This includes securing all employee phones and laptops, strengthening your company firewall, enabling two-factor authentication, and having different logins for anyone with access to sensitive or private customer information.
All of this will protect your business, employees, and customers and better alert you when an account is compromised.
Train Employees and stay aware and diligent
The best defense is a strong offense. That starts with an informed and trained staff where employees are aware of how scammers operate and to never send passwords or sensitive information by email, even if it appears like the request is coming from a manager.
Business owners should also establish systems and procedures in place on how to report and deal with suspected fraud. Lay out a step-by-step process employees should follow when paying vendors as well.
If you, your business, or your employees do fall prey, report what happened to the Attorney General's Office or file a complaint to the Federal Trade Commission (FTC) and the Better Business Bureau.
When it comes to doing business on the internet, cybersafety and security is paramount. Ensure you and your staff are informed, trained, and stay vigilant in your efforts.
At R&R Legal, we are committed to protecting you in all aspects, including sharing our own knowledge and expertise as business owners. Contact us for a free consultation and see how we can ensure you and your business stay safe and secure from scammers and all of life's challenges.