Don’t Let Your Business Get Scammed
In 2019, scamming and fraud are on the rise. YOu’ve probably recognized some phone calls or emails that you’ve received this month already. So far, the CAFC has received 20,000 reports of scams that lost Canadians a total of $43 million, and these are just the ones that get reported. From 2017 to 2018, reports of scams increased by 20%.Small businesses are a big target for scammers because of the potential payoff. Let’s look into some common scams and the best ways to avoid them.
Why Do Smart People Get Scammed?
The Offer of Money or a Reward: Positive Incentive
You’re an entrepreneur. You receive an email from someone saying they’ve recognized you in the entrepreneurial community and they have an offer for you to help you start your next venture. All you have to do is pay a small administration fee.
This is the typical scam you might recognize or at least some form of it. Pyramid schemes, or get a free vacation, just pay a small amount to confirm you’re serious.
Fear or Threats: Negative Incentive
Someone threatens your business with legal action because they’ve accidentally overpaid you for something and they want the extra money back. You don’t want anything bad to happen, so you send them the extra money back, their check bounces, and you’re out that money plus what you paid them.
It’s easy for scammers to play off your fears, especially when it comes to something that’s important to you.
Lack Of Knowledge of a Particular Subject
It’s not your fault if you’re overworked or too busy. Starting or running a small business is hard work. Plus, no one can be expected to know everything, especially things that are completely unrelated to their line of work. But scammers know that, and they know who to target for these kinds of scams. For example, they might target a business owner of a plumbing company for an internet marketing scam. He or she might be a busy individual whose knowledge base is centred on plumbing. They don’t have much knowledge about tech beyond their personal devices.
Things To Remember About Scams
Scammers also know how to tell if their target is worth pursuing. Have you ever gotten an email from a supposed Nigerian Prince, and groaned at the grammar errors and spelling mistakes? You’re probably wondering how anyone could fall for that stuff and why, if a scammer is trying to target English speakers, they wouldn’t take a moment to at least trying to learn proper English.
Those grammar and spelling mistakes are actually part of the scam. If you don’t notice the fishy (phishy?) spelling, then the scammer can assume you’ll be less likely to think critically of the situation as a whole. It’s kind of like a filter for observant people. Scammers might use other filters too, like throwing in facts to determine if you recognize that they’re wrong. By filtering out people who will catch on too quickly, scammers can focus on the targets that are more likely to believe their story.
Scammers prey on your emotions. They make you feel bad for them or they threaten you if you don’t send them money. They tell you you’ll get a large sum of money, the kind that would change your life. Unfortunately, it tends to be the most vulnerable of us that are prone to falling for these scams; older people, people in difficult situations who could really use that extra money. That is simply the nature of these scams.
What are the Different Parts of a Scam?
A scammer dangles something in front of you. It could be a refund from some computer service you supposedly have that is going out of business or it could be the threat of jail time for a crime they’re claiming was committed under your name from having your identity stolen. Note that in the latter case, they won’t even know your name most of the time until you give it to them. Usually, this is where the emotion comes into play.
If you follow through and begin asking them questions about why you’re receiving money, being threatened, or being rewarded, scammers will coax their victims into a comfort zone. If scammers are good at their job, once they get a victim past this part of the scam, the target becomes so indentured in the scam, that they won’t recognize other red flags.
Sometimes this comes in the form of a “realization” that the scammer has sent you too much money and they are “panicking.” Sometimes it’s when the scammer starts to collect your information to supposedly send you money. Other times it’s when you allow them to connect to your computer. Sometimes they put you in a position you can’t get out of: take hostage of your computer and threaten to delete your files, or say they have your banking information and can take all your money–which is a lie, or perhaps they are just so good at lying, that their victim believes them through and through.
Then they ask for the money. They may ask for an e-transfer or gift cards or that you wire them money. It’s usually in ways that you can’t undo or trace the scammers with. If they pretend that they’ve overpaid you for something, they just ask for the difference back. But often, instead of paying you $400, they accidentally add an extra 0. That means you owe them $3600. But after you’ve given them that money their cheque will bounce and you’ll be out the whole amount. Or perhaps you need to send them a deposit to receive a reward, or maybe you need to make a deposit to take advantage of a great entrepreneurial opportunity.
Scammers try to collect money in ways that cannot be traced and cannot be revoked. That’s why when you’re in the Gift Card section of your grocery store, you might see a sign saying that debts cannot be paid with gift cards and warning you about scams. They might ask for another type of reloadable card or a wire transfer.
And (Usually) The Disappearing Act
Sometimes scammers don’t disappear right away. Sometimes, if the scam went well, they will try a different kind of scam on you. If not, or if the kind of scam doesn’t allow for it, they will disappear. A good example of this is the Google My Business scam.
You receive an automated call from “Google” saying you can set up your Google listing easily and cheaply to get more customers through Google. You bite, and it turns out the company that called you is supposedly just a representative of Google, and that you need to pay them a small sum of $500 to get the listing. Except that Google listings are free—but even tech-savvy people who aren’t knowledgeable about Google, or SEO, might not know that. So you pay them the $500 and sometimes even grant them access to your Google account, and then… all of a sudden, you don’t hear from them ever again.
Tech support scams are the kind of scams where the scammer may stick around. They’ll say you need a security service which will cost you a certain amount of money. They remotely access your computer and pretend to be doing something (when really, they’re not doing anything) once you’ve paid them. Then they may come back to you later offering a different service for your computer for more money.
Where are People Conducting Scams?
Scammers may show up at your door, or even approach you in a public place under the guise of trying to sell you a service. You probably already know not top let salespeople into your home unless you are already familiar with them and their company.
Often these kinds of scams are just excuses to get into your home and either look for valuables to steal or “inspectors” who tell you that you need to upgrade something in your home to be up to code and ask you to put a deposit down on the work. They never come back.
People often pretend to be someone you would be inclined to trust, such as a government official, so always beware of scams going on in your area.
On the Phone
If you receive a phone call with a caller ID apparently from a wing of the government or another organization you trust, you should know that caller IDs can be faked, too. If you receive a call from someone who is threatening you or asking for money, and even if you think it’s real, you can call them back at their official business number—you can look this up on their website or in a phone book if you’re old school.
Some scammers will call and pretend to be a relative in need of help. They use tactics like fear and information overload to distract you from what’s actually happening—say, for example, that their voice doesn’t sound like your relative, but they give you so much information about their emergency situation, that you don’t even have time to think about it.
Another one that everybody is usually aware of is robocalls. Usually, robocalls aren’t legitimate. If you’re ever not sure, always call the company or business at a number that you can confirm is theirs—from a business card, their website, etc. If you don’t recognize the business and can’t find any information on them, it’s probably a scam, or at best telemarketing.
On the Internet
Internet scamming is more common now than ever before. The internet has made it incredibly easy to run these kinds of scams because it allows people from all different walks of life to be connected. Oftentimes, scammers take advantage of aspects of technology and the internet that the general public doesn’t or can’t really understand.
Online scams come in many forms, from emails with links that try to steal your information, also known as phishing, to supposed virus popups with phone numbers to call that end up leading you to a false IT company that will then take hostage of your computer.
Often, scams are a combination of all these different methods of conducting scams. You’ll initially receive a phone call about your computer being corrupted, so they get onto your computer and ask you to log in to your bank account, and on and on. You should never let someone you don’t know have remote access to your computer, particularly if they contact you first. Customer service shouldn’t need access to your computer to help you fix a program.
Who Gets Scammed?
By the nature of a scam, it is the most vulnerable people who tend to get scammed. Scam tactics rely on the victim not knowing a lot about a subject or becoming overwhelmed with information. Keep in mind that this does not mean being young or of sound mind protects you from being scammed. There have been scammers targeting millennials in Toronto by writing bad cheques. Because millennials aren’t used to dealing with cheques, this creates a vulnerability for them that scammers take advantage of.
It also means that if you are in a tough situation, for example low on cash, a scammer might be able to take advantage of your emotional state.
In summation, everybody gets scammed. It’s really just a matter of when—and it’ll probably happen when you’re already having a terrible day. Because that’s just how it works.
How to Avoid Getting Scammed
Knowledge of Common Scams
Knowledge of a scam is usually enough to help you avoid getting scammed. If you can recognize a scam from the start, you save yourself a lot of trouble as these scams can sometimes take hours to go through, even if you don’t end up paying the scammer.
Forms of Payment That Are Untraceable
No reputable company will ever ask for gift cards as the only possible form of payment. Things like gift cards and wire transfers are very difficult to trace and can’t be returned once they’re used. If a company will only accept one kind of payment and insists on that kind of payment, that’s a red flag.
They Insist On Secrecy
If the person you’re on the phone with tells you not to talk to anyone about the situation, something is not right. No reputable company will insist on you keeping the situation private when you try to solve a problem. Ultimately, you shouldn’t do this. Seek advice from people you trust—friends and family—even if the person on the other end of the line says it’s a bad idea.
What To Do If You’ve Been Scammed
I’m sorry if you’ve found this article too late. But there are still steps you can take. Report the scam to the CAFC and you may help prevent others from being scammed. If you have information, the CAFC working together with the police might be able to disrupt the scam.
The Bottom Line When It Comes To Scams
The most important thing to do when it comes to scams is to ensure you are informed about what the current scams are and how to protect yourself from them. With the internet changing so quickly, so do scams, making it easier to catch you off guard. If you’re familiar with a scam, you’re going to recognize it quicker.
Keep in mind, we’re not scam experts. You can check out the Canadian Anti-Fraud Centre here and make sure you’re aware of any small business scams.