Common scams that could affect your small business and how to avoid them
Theft is nothing new. It’s a crime as old as society itself. But with more sophisticated technology coming into the world, thieves are becoming craftier. They’re using new methods to trap small businesses, fraudulently stealing money and data, or hacking systems. It’s more difficult than ever to avoid being the target of a scam or cybercrime.
Action fraud figures show one in four small businesses are victims of fraud each year. The estimated cost is around £19 billion. If your business fall foul of a scam, it could hurt your financial standing and your reputation. This could affect your life outside of the business, as well as your staff’s. During the Christmas period, this is the last kind of stress you need on your plate.
Here are a few things to look out for and consider when trying to stay safe as a small business.
Know where the risks are
It’s important to remember fraud can come from anywhere. This includes:
- Staff members
- Third parties unconnected to the business
It doesn’t matter who you’re dealing with, you should always approach situations with a hint of scepticism, especially when it seems too good to be true.
Con artists often specialise in filing no-win,-no-fee claims against small businesses for things like slips and falls on your premises. Or they may cause an accident with vehicles displaying business names to fabricate a claim.
It sounds a little far-fetched, but insurance fraud is common. Aviva detected £80 million worth of fraudulent insurance claims in 2018. Ways to protect yourself include ensuring you have great insurance coverage and installing security cameras around your premises and dash cams in vehicles.
Phishing emails are common. While email providers, anti-malware software, and other cybersecurity measures try to filter them out, some may slip through the cracks. They look like regular emails from your bank, HMRC, or other official bodies. But opening and clicking links in these emails can allow scammers to steal data and financial information from you.
Your clients may have been hacked previously and their account might be used to send malicious emails to you to trick you. Make sure your cybersecurity is up to date and ensure you train staff to spot phishing emails.
Office supply scams
Some scammers pose as suppliers and call to ‘remind’ you it’s time to reorder stock, often office supplies. If they trick you or your staff into agreeing, you’ll soon receive an order of overpriced stock. Sometimes you’ll receive merchandise you never ordered, then scammers will harass you for late payment.
Ensure your ordering procedures require a purchase order and signature and make sure your staff know of these types of scams.
There are plenty of scams criminals use to steal money and data from small businesses. The best way to defend yourself is with knowledge. Make sure you and your staff are trained to spot and deal with scam attempts and how to deal with them.
Sometimes scammers do get through. Making sure you have adequate insurance, security measures, and a good business recovery plan will help you stay strong despite the fraud.
When you’re a small business, there’s a lot to think about and the pressure of success often falls on only a few shoulders. Big Hand takes over your accounting to free up some of your time so you can focus on the important things in life. Our small business advice will help you achieve your goals with ease. To find out more, just get in touch on 0161 327 2911.