How to Protect Yourself: Small Business ScamsSource: Florida Attorney General's Office
Small businesses have increasingly become the target of scam artists who use their knowledge of small business practices to fraudulently induce these businesses to pay for services never performed or for products never delivered. These scam artists use a number of different techniques which include: sending phony invoices for items never ordered; using prizes as an inducement to sell overpriced office equipment and supplies; sending phony invoices or correspondence appearing to be from the Florida Division or Corporations or another government entity; and sending phony yellow page advertisement renewal forms which are actually contracts for advertisement in other directories. Consider the following to avoid small business scams:
Employ procedures to verify any and all incoming invoices prior to payment. Compile a listing of all suppliers with whom you normally do business by name, address and phone number and make the list available to anyone responsible for the payment of your invoices.
Educate your employees.
Make your workers aware of the most common types of scams against small businesses. Obtain pamphlets and literature concerning small business fraud from your local police agency or consumer affairs bureau. Post this information at your business.
Don't buy over the phone.
Unless you have a previously established relationship with a supplier of business or office supplies, never make orders or purchases over the phone. Scammers sometimes obtain the names of business employees and assert that these persons have placed orders on behalf of the business. Instruct your employees to verify the order with the person who placed it.
Ask for verification of offers in writing.
If a caller makes an offer regarding the provision of goods or services that interests you, request that the offer be made in writing and forwarded to you for review. Be wary if the caller refuses to forward this information to you or to otherwise provide references.
Beware of prize or "free trial" offers.
Small business scam artists often offer prizes or “free” gifts as an inducement for the business to purchase their products. Be aware that these "prizes" are usually overpriced or are of inferior quality. In addition, by agreeing to a “free trial” offer you may be unwittingly enrolling in negative option plan, in which you will be charged monthly until the enrollment is canceled.
Beware of solicitations that appear to be bills or official mailings from federal, state, city or county governments.
Before sending payment or providing personal or confidential information, confirm with the government entity that the mailing is legitimate and any document being purchased is required to conduct business. Pay special attention to fine print and look for disclaimers which may indicate that the mailing is a solicitation or that the document offered is unnecessary. Also, be wary of any company whose staff uses high-pressure sales tactics to convince you that your business is in need of a particular document in order to continue doing business.
Do not be influenced by a money-back guarantee.
While a money-back guarantee is nice to have, these guarantees are only as good as the companies offering them.
File a complaint.
If you suspect you or your business has fallen victim to a small business scam, file a complaint with the Attorney General’s Office online at www.myfloridalegal.com or by phone toll-free at 1-866-9-NO-SCAM. Additionally, you may wish to file a complaint against the company with the Federal Trade Commission at www.ftc.gov/complaint and with the Better Business Bureau at www.bbb.org.
You may also file a complaint with the Florida Department of Agriculture and Consumer Services, which acts as the State's consumer complaint clearinghouse, at www.floridaconsumerhelp.com.