How to avoid brazen business scams

Scammers spend so much time and ingenuity on their schemes to defraud people, that I often wonder why they don’t just “get a job.”

The answer is, sadly, because the scams work.

According to AARP, Americans lost $8.8 billion to scams in 2022. Businesses have suffered even greater losses from myriad fraudulent activities. The FBI Internet Crime Complaint Center issued a report that “business email compromise” accounted for over $83 billion in losses in 2022 alone.

The scams run from petty to catastrophic. If you run a business, you need to be aware and take precautions against multiple scams.

“Slip and fall” fraud

While it might seem almost quaint compared to cybercrimes, fake “falls” followed by lawsuits for soft tissue damage (which doesn’t show on an x-ray) still happen. Install cameras and make sure you are adequately insured.

Phishing email scams

Last week’s article discussed email phishing scams. They happen to businesses, too. My office receives several a week.

Sometimes the attachment is allegedly a late bill, a “settlement proposal” (they know they’re emailing a law office), or an invoice. All of them come from unknown email addresses that read something like wsjjhgeku771623xii8@aol, although the “name” attached to the email is often my own or some version of an actual company with a minor twist (e.g., PGElectric instead of PG&E).

These attachments are likely malware, ransomware, viruses, or attempts to obtain passwords or other personal information. The emails get blocked and deleted. No attachments are opened.

Everyone in my office knows to be on the lookout for them and not open any attachments from unknown senders. We also have a secure portal for sending and receiving sensitive documents.

Supplies fraud

There are several variations of this scam.

In one, fake invoices are sent in the hopes your accounts payable person or department won’t notice, or the invoice has a name very similar to a company you do business with.

In another, a call is made “reminding” you that it’s time to renew your ink or toner or some other office supply order. If you agree, unordered (and usually cheap) supplies will arrive along with a hefty bill. Be sure you know who you’re dealing with before agreeing.

Hang up, check the bill from your usual supplier, and call them at the number on the bill.

Incidentally, if you receive products you didn’t order, the FTC says you have the right to keep and use the products without payment.

Impersonating the government

This scam has as many variations as there are governmental entities, maybe more. These scams look like this:

— Attempts to sell you “workplace compliance posters” that are free from the Department of Labor.

— Attempts to get you to pay hundreds of dollars for “corporate compliance documents” which likely aren’t required for your business or that can file for yourself online with the secretary of state in minutes.  In addition, they ask you to provide information that could be used in future scams (like tax ID numbers). These letters often look like they came from the government and have names like “California Corporate Compliance.” Often, they will have small print that clarifies they are not affiliated with any governmental entity.

—Threats to cut off your utilities if payment isn’t immediately made. Again, hang up. If you’re concerned you missed a bill, call the utility yourself.

— Impersonation of the IRS,  the “Revenue Service,” or “California Tax Authority” with threats to close your business due to late payment of taxes. (The IRS and the California FTB send plenty of written notices before they show up at your door. And they don’t email.)

— Solicitations to “register” your trademark or copyright with a registry that either doesn’t exist or exists only among victims who unfortunately paid for it. If you received a trademark, you registered it with the US Patent and Trademark Office as part of that process.

Changing online reviews

In this scam, the caller will offer to erase your bad or lukewarm online reviews and replace them with glowing reviews for a fee, often substantial. However, posting fake reviews is illegal.

FTC guidelines say reviews must reflect the honest opinions and experiences of the endorser.

Vanity awards

You receive the great news that you’ve been selected as one of “America’s Top 100 Best Looking CEOs” or some other random award from an allegedly prestigious publication.

Then they ask you to pay for the plaque, prominent placement in the “program” or “magazine,” and multiple copies to hand out to friends and clients, and before you know it your ego has cost you hundreds if not thousands of dollars.

Then you find out the publication either doesn’t exist or only gets mailed to you and the other victims of this fraud.  If you haven’t heard of the publication, chances are neither have your customers or clients. And if they’re asking you to pay, they’re not really honoring you. But hey, we think you’re good looking.

Gift and debit cards

If you’re being asked to pay an alleged debt in gift cards, Visa cards or even cryptocurrency, you can be pretty certain it’s a scam. The IRS doesn’t take gift cards as payment, and neither do legitimate businesses.

The Federal Trade Commission has a brochure, Scams and Your Small Business: A Guide for Business that can help you and your employees recognize scams. Stay vigilant, confirm where emails or phone calls are really coming from, and trust your instincts. These fraudsters have all day to come up with new scams, and they are doing just that–after all, they don’t have real jobs.

Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles, CA. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” Reach via email at Teresa@trlawgroup.net