Mar 03 2016

Fraud Methods Attacking Small Companies

Fraud Methods Attacking Small Companies

Fraud and/or scams are not restrictive and they have been done or run on just about every type and status of individuals.  When you have taken the step and formed your small company or business, you also acquired a target on your back from those that want to take what is yours as the owner.  There are multiple methods used against small companies as you are the easiest of possible business targets.

As a company owner, it is always wise to have access to legal and financial assistance.  This article is not to be considered legal advice and is only given as information.  If you have been approached or you feel, at any time, that you were a victim of fraud or a scam, call your legal counsel or the police.

The safest prevention from becoming a victim of fraud or a scam is being informed.   Most individuals don’t think this way, however, if you are large enough to have employees, be sure that everyone is told of existing fraud attempts against your company or take the time so that your employees are educated on other possible methods that might be tried.

  1. Listings In A Directory – Probably the oldest is soliciting for directory listings. At some time, you have probably received a piece of mail, telephone call and now email is being used.  They will tell you that your company’s listing has expired or that your company is not listed at all and you are losing several customers a day.  Some scammers will push hard to trap the employee who answered into agreeing to the listing over the phone or via email.  If the employee agrees verbally or by email, the call is normally recorded and the email is written confirmation that can be used as backup and proof that your company gave their consent to pay for this listing.  This is where and why letting your employees know of this method, as well as, who is responsible to make these types of decisions will keep your employee and your company from being charged for these listings.   A no thank you and hanging up works too.


  1. Charities – This takes in individuals because scammers know they can pull on your heart strings. A scammer’s primary approach is by telephone.  They impersonate as representatives of local unions or auxiliaries of local or national charities, police or firefighters, these three are probably the hardest hit.  Strong tactics are used for you to agree to their fund raiser.  Again, to know who would make these decisions allows the employee to either transfer the call or say no thank you and hang up.  If you do want to participate with any of these, initiating the call yourself or stopping by a police or fire station will get the information you need to make your donation.


  1. Loans – In the current economy some companies find they have a cash flow problem and resort to low interest business loans that promise to take their business to the next level. These low interest friends are promising you your loan will be processed immediately if you will pay an application fee and wire transfer.  There are numerous instances of individuals, as well as businesses, who have been ripped off and the money will never be recovered.   As a business owner, you should establish a relationship with your financial institution to assist with your loans.


  1. Phony or Trojan Horse Checks – Now, who is going you send you an undeserved check worth usually thousands of dollars and more fine print than you have ever seen on a check? These are Trojan Horse checks and there is a reason for this fine print.  If you deposit the check, you have accepted and confirmed responsibility, sight unseen, for all of the charges and fees the issuer has established and maybe more.   They could be one-time or worst yet, unending.  If you haven’t heard this yet, here it is, there is no free lunch!  Someone had to have paid for it so don’t let that someone be you.

Be safe and again contact your financial or legal counsels with any questions or concerns regarding your company and what has been presented to you above.


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