It is crucial that your team are aware of scams that are frequently targeted at independent retailers. Large organisations might have complex security systems in place, employees dedicated purely to loss prevention and of course a much greater cashflow with a buffer in place to write off certain amounts for fraud or theft. As a small business you are unlikely to have these things in place and just one loss through fraud can have a serious implication on your balance sheet.
Here is a list of scams commonly targeted at smaller businesses and independent retailers like yours:
You might receive a letter through the post offering you the opportunity to correct a listing in a directory. Often called a ‘commercial register’ or similar (designed to appear similar to companies house), it is very likely that an element of your details in the letter will be intentionally incorrect, encouraging you to correct the details and return the paperwork. Usually the fine print will reveal that you are actually completing an order form that will lead to an invoice, and the publication or website will either be non-existent or have very little use in directing new business your way.
When you receive any email you might take for granted that it tells you who sent it. But did you realise that it is actually very easy for a scammer to make any name appear in that ‘from’ column? We’ve seen very cleverly targeted emails sent to accounts personnel within an organisation, that appeared to be from the MD, asking for substantial sums of money to be sent via BACS. Only picked up when the accounts department noticed that once they’d clicked reply, a different email address appeared in the ‘to’ box, this could very easily have lost the company thousands. Many small businesses have websites with staff directory pages, so the scammers don’t have to work too hard to discover who to pretend to be and who would be most likely to action their request.
Although these are not a scam in terms of legal position, and indeed many of your industry awards may involve an entry fee and offer good value in terms of exposure, there are plenty of ‘awards’ out there that involve an entry fee (or even guarantee your win based on a fee) yet offer little in the way of benefit for your business. We recommend looking at any potential award’s history – who won last year, where was the ceremony held, how has it benefited previous winners, etc.
Often targeted at individuals selling cars (or other high value items) as well as businesses, the scammer will offer to pay your asking price in full, and insist on using their own courier (or other add-on service). They pay you the higher amount, often using paypal or a similar protected payment service, and request that you pay the courier directly. The courier typically will only accept Western Union, or another unprotected payment service. The original payment made to you will turn out to be fraudulent and the funds will be taken back, yet the money you sent to the ‘courier’ will be lost. In general we recommend treating ANY request to use Western Union with extreme caution.
This technique is commonly targeted at independent retailers offering low value items for sale. It’s a trick that relies on the scammer being confident and forceful, putting pressure on the salesperson to follow instructions and put trust in the scammer. Usually, the perpetrator will attempt to purchase a low value product using a high value note. While the till is open there will be a request to change payment to using coins, or another distraction technique employed so that the server has lost track of things. Often it will close with the perpetrator asking for their original high value note back, insisting that payment has been settled. These scams work best when there is a queue and the pressure is on to complete the transaction quickly, or when the sales assistant is new and unfamiliar with such scams, or if the perpetrator perceives that the sales assistant will be responsive to their demands.
We’ve heard of these scams using other organisations to add credibility to their request but by far the most common is ‘your local police force’. You might receive a telephone call and it often starts by thanking you for taking an advert in last year’s issue, in the hope that they’ll catch an employee who might be easily duped into thinking that your business supports them every year. In truth the publications are usually non-existent and even if they do make it onto a press they’re not likely to be connected to your local police force in any way at all. We recommend thoroughly researching any publications you’re tempted to advertise in before you commit.
Smaller businesses are increasingly being targeted by fraudsters who generate fictitious invoices for goods or services you haven’t received. At one end of the scale these invoices are very opportunistic and simply feature services that are intangible, like web hosting or security of some kind, in the hope they will pass through for payment unchecked. Fraudsters who specifically target your business might work a little harder to get your money – so avoid leaving paperwork around that might give clues about who your suppliers are and be suspicious of any requests from suppliers for a change of payment method.
Have you been a victim of one of these or another type of fraud or theft? Email us on firstname.lastname@example.org and we’ll add it to the list to warn other small business owners.