Have you been involved in a scam?
In today’s world you need to be one step ahead of scams. It seems everyday there are new scams popping its ugly head and they are not always easy to differentiate whether it’s a scam or not.
The best defence to protecting your business is by being aware of the most common scams targeting businesses, and knowing what to do if you’re targeted by a scam.
Tips To Ensure Your Business Is Protected
- If you become aware of a scam, let other people know, particularly those in your industry.
- Keep your filing and accounting system in good order. Its easier to detect bogus invoices/accounts that way.
- Don’t give out your personal or bank account details to someone you don’t know or trust.
- Make sure the business that is billing you is the one you deal with. Ask questions like the person’s name, business they represent.
- Ask for any offers to be in writing and consider getting independent advice if it involves money or a long term of commitment.
- Have clear set procedures with your accounting system i.e how invoices are entered into your system, how they are paid etc
- Limit persons or have the same person to place orders or pay accounts.
- Install a reputable software firewall and antivirus and keep them up to date.
Five Common Scams Targeting Small Business
1. Tax Refund Scam
This is one of the most common scams targeting small businesses. The scammer will typically pretend to be from a government agency, bank or private law firm claiming you are entitled to reclaim your overpaid tax or bank fees. They may also tell you that the refund is taxable and you will have to pay the tax amount before receiving the refund or that you have to pay a fee to receive your money.
The scammer might try to trick you by appearing to have personal information about you. They are after your personal information,your money and they usually ask you to confirm your personal details, or claim you need to pay an upfront payment to get your refund.
- Tip: do not provide or confirm your personal details, or give money to someone unless you made the contact or you know them.
- Tip: be wary if you are contacted by someone claiming to be from the government or a financial institution.
- Tip: if you aren’t sure a business or organisation is legitimate, you can check to see if they are registered on ABN Lookup.
- Tip: if you are approached by an agency that claims they are a charitable organisation, check to see if they are a deductible gift recipient (DGR). DGR’s are an entity or fund that can receive tax deductible gifts.
2. Overpayment Scam
This sort of scam involves scammers making contact to purchase goods and services from you. They then send you a payment by cheque,money order or credit card for far more than the agreed price. The scammer then asks you to refund the overpayment or to pay the scammer’s ‘freight company’.
The scammer is hoping you will transfer the refund or pay for ‘freight’ before you discover that their cheque has bounced or that their money order or credit cards were phony.
- Tip: be wary if you are overpaid for products.
- Tip: limit the number of credit card accounts that your business uses.
- Tip: be wary of complicated or unlikely orders.
3. Directory Entry or Advertising Scam
This scam involves a scammer sending you an invoice by post, fax or email for a listing or advertisement in a magazine, journal or
business register which you didn’t authorise or request.
Scammers will send a proposal for a subscription, disguised as an invoice or ‘renewal notice’ for an entry on a questionable website or in a questionable trade directory. Often these businesses are based overseas. It may sound like a ‘free’ entry, but charges can be hidden in the fine print, resulting in demands for payment later.
Another common scam is calling a business to confirm details of a pre-booked advertisement or to ask if you would like a ‘free trial’ – it’s only later that you find your business has actually been charged for the unauthorised advertisement.
- Tip: if you receive a request to confirm details of an advertisement, check your own records to see whether your business made this booking.
- Tip: be aware that a scammer may quote a genuine entry or advertisement that you have placed already in a different publication or directory to convince you to pay.
- Tip: if you receive an offer for a free trial, check for any hidden terms.
4. Office Supply Scam
This scam involves you receiving and being charged for goods that you did not order. These scams often involve goods or services that you regularly order: paper, printing supplies, maintenance supplies or advertising. You might receive a phone call from someone claiming to be your ‘regular supplier’, telling you that the offer is a ‘special’ or available ‘for a limited time only’. If you agree to buy any of these supplies that are offered to you, they will often be overpriced and bad quality.
- Tip: if the caller claims that your business has ordered or authorised something and you don’t think it sounds right, ask for proof by requesting the order number or getting them to send the order to you in writing.
- Tip: check that goods have actually been ordered and delivered before paying an invoice; and that you are happy with the quality.
5. Website Domain Scam
Under this scam you’ll be sent either an unsolicited invoice or email for an internet domain name registration usually very similar to your own business domain name. Or you’ll be sent a renewal notice for your actual domain name. The notice could be from a business that supplies domain names trying to trick you into signing up to their service or it could be from a scammer trying to take your money.
- Tip: If you have a registered domain name and receive a renewal notice, check that it matches your current domain name exactly – look for small differences such as ‘.com.au’ instead of ‘.net.au’. Remember, even if the core business name is the same, it could be a completely new domain name.
What to do if you become aware of, or are a victim of a scam
If you spot a scam or have been scammed, you can contact a number of Australian Government agencies for advice or to make a report. By reporting the scam to the appropriate government agency, you can help them identify scammers and warn other businesses about the scam.
The Australian Competition and Consumer Commission’s (ACCC’s) Small Business Scams Fact Sheet (PDF 0.13MB) also provides
tips to help protect your business from scams. You can also call the ACCC Small Business Helpline on 1300 302 021.
It’s a good idea to check chain emails to see if they are a hoax. I check out hoax-slayer.com before sending on chain emails. This site has ‘categories’ of emails – from true to hoax emails.
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