We all can be targets, but for some scammers, small businesses can generate a big payday. Finally starting your own business can be a dream come true, but with that dream can come a nightmare when con artists come calling. Your Better Business Bureau is partnering with state and federal agencies to stop small business scams. This is a law enforcement initiative seeking operations trying to defraud small businesses. It also is an educational outreach effort to help small businesses protect themselves from fraud. BBB joined with the Federal Trade Commission, eight state Attorneys General, the U.S. Postal Inspection Service and two U.S. Attorneys’ Offices to launch the efforts.
BBB Northwest + Pacific participated in the study by surveying thousands of small businesses in Alaska, Washington, Hawaii, Oregon, Idaho, Montana and western Wyoming. The top five riskiest scams are bank/credit card company imposters, directory listing and advertising, fake invoice, fake check and tech support. “Anyone could be a scammer’s next target,” said Chuck Harwood, director of the FTC’s Northwest Region Office. “Small businesses are not immune from the threat, as the BBB’s new report shows, and the monetary loses may be sizeable. Thanks to the team at BBB Northwest for calling attention to the harm that scams victimizing small businesses do to our regional economy, for encouraging a dialogue about prevention, and for supporting law enforcement actions such as those the FTC is announcing today.” “We knew that we needed thorough research to fully understand the types of scams targeting our small businesses,” Tyler Andrew, CEO of BBB Northwest and Pacific said. “This study helps us to focus our fight against scammers by spotlighting how these con artists are tricking our businesses and how we can help minimize that impact.”
The three top small business scams that often hit small businesses are bank and credit card scams, directory listing scams and fake check scams.
The bank and credit card imposter scams are the riskiest scams, based on our measurement tool that factors in exposure, susceptibility and monetary loss. Under the guise of verifying account information, scammers fool their targets into sharing credit card or banking information.
Directory and advertising scams target all businesses, but especially new companies that are beginning to grow their customer base. They are looking for new ways to get the word out about their products and services. Scammers ask them to pay for an advertisement in a directory or Yellow Pages. In some cases, the directory exists but is not widely distributed and therefore worthless.
The fake check scams can occur in various ways. Sometimes the check is a payment for products or services, but it’s an overpayment and the scammer ask the business to wire back the difference. In either case, businesses are asked to deposit a fake check and wire the difference. The business later learns that the check is fake after they’ve wired money to the scammer and the business is liable for the missing funds.
Jeremy Johnson is the eastern Idaho marketplace manager for Better Business Bureau, serving the Northwest and Pacific. Contacther at by emailing email@example.com.