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A recent PayPal commissioned global report revealed that Australians are the most fearful people in the world when it comes to identity theft and fraud – an unsurprising statistic considering the sheer number of scams that seem to be circulating these days. You can protect yourself and your business by being aware of the common scams targeting small businesses.
False billing scams
The most reported of small business scams, false billing scams often manifest themselves in the form of subscription forms disguised as an outstanding invoice or a “renewal notice” that get businesses to sign up for unwanted ongoing advertising services or unauthorized listings in magazines, journals, business registries or a directory.
Scammers often falsely claim that the publication or directory is well-known and has a high readership, and the offer may sound like a “free” entry but charges can be hidden in the fine print, resulting in demands for payment later.
Warning signs are:
Tips to protect you from false billing scams are:
Phishing refund scams
A phishing email that claims that the recipient is entitled to a “tax refund” is currently circulating and states that recipients should click on the embedded link or open an attachment to complete an online form to receive the refund. These emails can differ in their appearance and level of sophistication, but key indicators of this scam are:
How to deal with phishing emails:
Yellow Pages directory fax scams
In early August, the Australian Competition and Consumer Commission (ACCC) warned small businesses to watch out for fraudulent faxes claiming to be from Yellow Pages Australia and Open Business Directory.
Key indicators of this scam are:
How to deal with fraudulent faxes:
Over payment scams
This involves scammers making contact to purchase goods and services from you, and then sending 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 over payment 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.
Businesses may end up losing money, as well as the item they were selling if they had already sent it to the scammer. Common products that over payment scammers target include used cars or boats, and electronic items such as smart phones, tablet devices and laptops.
How to detect over payment scams:
Investment scheme scams
This scam usually involves telemarketing campaigns peddled as tax-free opportunities, which often turn out to be sports betting schemes or betting software offers in disguise and are nothing more than gambling.
Domain name scams
Under this scam, you’ll be sent either an unsolicited invoice or email for an internet domain name registration very similar to your own business domain name or a renewal notice for your actual domain name. If you have a registered domain name and receive a renewal notice, check that it:
Office supply scams
These scams often involve products or services that businesses regularly order such as
stationery and cleaning supplies. Scammers typically call businesses pretending that the service or product has already been ordered and will pretend to be a business’s “regular” supplier – telling them that the offer is “special” or is available for a limited time.
Email intercept scam
Under this scam, the scammer gains access to your supplier’s email account and intercepts emails going from you to the supplier and vice versa. Using this technique, the scammer is able to send you a deposit invoice and change the bank account details – causing you to make the money transfer to the incorrect account.
Akin to an extortion scheme whereby scammers hijack your computer files and then demand a ransom so you can have them back, ransom ware scams sometimes involve users finding that their computer has been frozen. Scammers have used pop-up alerts that claim to be from the Australian Federal Police saying that the computer has been locked because a business has visited an illegal website or breached various laws. The scammer claims that they will unlock the computer if a fee is paid.
In order to protect yourself from a ransom ware attack,
Fax back scams
Scammers fax businesses an offer that requires one to accept by sending a fax back to a premium rate number (starting with “19”) to accept. The scammers make sure that it takes several minutes to process the fax, resulting in a hefty phone bill.
Scams succeed because they look authentic and prey on time-poor small business owners. Protect yourself and your business by being aware of the common tricks employed by scammers.
This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Financial Wisdom advisers are authorized representatives of Financial Wisdom. Information in this document is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document. This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.