Watch out for these 5 business service scams

Preventing fraud from costing your company can sometimes seem like a game of whack-a-mole: Squash one scheme and another one pops up. Business service scams are particularly abundant. Fraud perpetrators know that business owners don’t always have time to verify the identities of salespeople or service reps and the legitimacy of their claims.

Your best defense is to refuse to pay anyone anything until you’ve ascertained the facts. It also helps to know what schemes are popular with criminals. Here are several to watch for.

  1. Utility bill fraudsters. Someone claiming to be from your gas, electric or water company may call and say services are about to be cut off for nonpayment. However, you can stop the discontinuation if you immediately pay the past-due amount via a wire transfer or with a reloadable card. Utility scam artists instill a sense of urgency to discourage owners from researching their claims.
  2. Google scammers. Con artists used to pretend to represent the Yellow Pages. These days, they impersonate Google and tell businesses that if they don’t pay a fee, the search engine will list them as “permanently closed.” In a variation on the scheme, a caller might offer to improve your Google ranking — for a price. Although there are legitimate search engine optimization consultants who can help improve your company’s visibility online, they don’t generally make these kind of calls.
  3. Reputation fixers. In another Web-focused scheme, shady operators offer to erase negative reviews on sites such as Yelp and Amazon or to boost your company’s overall ratings by posting positive (but fake) reviews. Posting false reviews is illegal. Don’t jeopardize your company’s reputation by accepting such offers.
  4. Government misrepresentatives. You may already have heard about fraudsters impersonating IRS agents. But crooks can — and do — adopt a variety of other government aliases. For example, businesses have received letters from the “U.S. Patent and Trademark Office” claiming they’d lose their trademarks if they didn’t pay a fee immediately. Other businesses have been told by the “Department of Labor” that they need to buy workplace compliance posters that are, in fact, free. And various scams operate under the guise of the “Small Business Administration” and its loan programs.
  5. Illegitimate business brokers. A “business broker” might call and offer to help you sell your company. In one scam, the “broker” claims that a buyer is already interested in paying top dollar for your business, but first you’ll need to get it “valued.” The caller asks for a large down payment, and if you pay it, you’ll likely never see the money again.

Unfortunately, this list represents only the tip of the iceberg. Fraud perpetrators are constantly looking for new ways to defraud businesses, so it pays to be skeptical of sales offers and delinquent bill claims until you can research them. If you’re looking for a vendor, ask trusted professional advisors or fellow business owners for recommendations.

Please reach out to your trusted Smolin professional with any questions or concerns.