Mar 05 2016

More Fraud Methods Attacking Small Businesses

More Fraud Methods Attacking Small Businesses  

You saw Thursday what fraudulent methods scammers were using to take your money – fake directory listings, misrepresenting established charities, no interest loans and free money from fake or Trojan horse checks. You can’t let down your guard and you won’t be able to as long as any individual is around trying to illegally take away what is legally yours.

As a business owner, it is always advisable to be able to contact your financial and legal counsels for assistance.  This article is not given or to be considered advice, legal or otherwise, and is only provided to inform and educate.  If you have been contacted or you feel at any time threatened or were a fraud or a scam victim, call the police, legal counsel or financial professionals.

The old adage of an ounce of prevention is worth a pound of cure, is just as true as forewarned is forearmed.  Educate yourself, your employees or staff and keep everyone aware of these or other possibilities to defraud you or your business.


More Fraud Methods Attacking Small Businesses  


  1. Federal Government False Filings – Unless you have been asked to provide details on your company by your trusted financial or legal counsels, it is strongly recommended that you protect your business information, as well as your personal information. This method of fraud needs your company’s information and tells you that you need to pay the processing and/or filing fees to a particular (and fraudulent) company and will use payment methods not normally recommended by legitimate government entities.


  1. Fake Invoices – There are numerous small companies who receive an invoice for a product or service their company never ordered and it is automatically paid without blinking an eye. As your company’s owner, you should be aware of the day to day operations and costs of your company. You need to be sure you have a cross check, especially when scammers have grown in sophistication in their design of counterfeit invoices.
  • On a side note not as a fraud or a scam but for duplicated payments: Have someone sign off on the invoice as ordered and received or if you have grown to have accounts receivable and accounts payable personnel or departments, it is imperative that each knows what the other is doing.  You might be surprised at the number of larger companies that these two departments don’t talk to each other at all.  Worst yet, some payable’s personnel have the ability to bypass accounting safeguards by altering a legitimate invoice number so it gets paid resulting in duplicating the payments.  If they had paid the actual invoice (and not a statement) and used the actual invoice number, most accounting systems would give a warning that the invoice number had already been paid.  That is money coming out of your pocket.


  1. URL or Domains – Receiving invoices telling you your company’s domain name, your URL address, is going to expire; pay up or lose your domain.  As most legitimate domain companies notify you via email, it is easier to verify their legitimacy.  If unsure, call the company you bought the domain name from, get your expiration date and note your calendar when the payment is due.  You then pay online, through the payment method you established when you purchased the domain initially.


  1. Con-artist Personnel – It is wise to have in place a system of checks and balances for your revenue streams. Reread #2’s side note.  Simple suggested methods to use are to incorporate authorization signatures to order; using purchase orders; retaining documentation of deliveries; having authorization signatures to pay; set and follow guidelines for all documentation to be attached to invoices and not statements prior to payments being made by your payable’s personnel.  You need to be able to trust the people you have in those If you are not writing the checks yourself, why would you want to place any individual or employee in a position to defraud you by skimming or altering payment methods or accounts.  Your financial and legal counsels can assist to ensure you have the right monitoring system in place for your protection.


Again, be safe in your business and company dealings and always contact your legal counsel or financial professional to answer questions or issues you might have about your company’s operations or systems and what has been presented to you above.


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