Small Business Scams

Small business scams are a big business. Here are just a few examples of them.

One of the oldest and most widely used small business scams is billing you for listing your company in an industry directory that no one else has ever heard of. There’s a reason for that: Many of those directories simply don’t exist. And the odds are that no one probably consults the ones that do exist anyway.

Small business scams that ostensibly produce these directories will contact their victims online or through the mail. Sometimes they will camouflage their offers as being industry-specific ‘yellow pages.’ That’s in order to hoodwink a victim into thinking that there’s a connection to the real thing.

Whatever they call it, the scammer will supply a form for the representative of the small business to complete and sign. The information that they ask for includes the company’s name, contact information, a brief description, and possibly a list of products or services it offers. Scammers who do their homework may actually forward you a completed form. If so, they’ll merely ask you to verify that all the information is correct and sign. Odds are that you may not see the fine print. It will mention how much the directory listing costs and that you agree to pay it. If you don’t catch that they’ll bill you and then bully you until you do pay.

Keep in mind that when this scam is for a web-based directory, the scammers will have a real website, but the lie is their claim that they are SEO (search engine optimisation) experts, so will get tons of internet traffic to their site. But instead of traffic, you’re just paying to park your business info in a digital parking lot.

Domain Name Expiration Scam

Not all small business scams target small firms. Some target all firms equally, small and large, new and established. One such ploy is the threat of URL expiration. That’s also known as a domain expiration scam or a domain name scam.

An email might show up in your inbox saying something like: ‘Your web address is about to expire if you don’t pay immediately to renew your registration,’ sent by a scammer masquerading as an internet registrar. Or it will be sent by someone claiming to be an attorney. He will inform you that his client, a businessman in a foreign country (where English is hardly spoken, to make it difficult for you to confirm he even exists) established a company that filed a request to register your URL with his local country domain suffix instead of yours. To prevent that, you will have to pay a large sum to purchase the local URL.

In each case the text will say that time is of the essence and if you don’t act now you will lose your company URL. Or small business scams will threaten you with some complex international litigation that could affect your right to do business in that foreign country. Well, that sounds like a big headache that you don’t need. So, rather than lose precious time and investigate, you just cough up the money and pay it. You know you can write it off as just another tax-deductible business expense.

Logo Trademark Expiration Scam

Scammers who do their homework have another canned email they often send to businesses with new corporate logos. That email claims that you owe money for a trademark registration. Your new logo just happens to belong to someone else half-way around the globe. Of course, if you don’t pay an indemnification fee immediately you will be hit with a lawsuit. This scam typically focuses on smaller businesses. Why? Because most likely they will not have an attorney on their staff who specialises in trademark law and who would know how to check if the claim is valid.

Small Business Scams that Impersonate Local Charities

It’s not unusual for a small business to be approached by local charities. These typically include the police benevolent fund, the local volunteer fire department or ambulance service. Other possibilities are the PTA at the closest school in the neighbourhood, the local hospital, or some other worthy cause. Sometimes, they’ll ask you to place an ad in their annual publication or next year’s calendar. Or help underwrite a worthy programme by making a donation. It’s hard to say no and it’s also a good business practice to oblige. That’s why charity scams frequently make those calls themselves and impersonate representatives of those legitimate organisations.

Small Business Scams that Impersonate the Small Business Administration

Yes, you read that right. In the United States, small business scammers are known to contact small business owners and, in order to deceive them, introduce themselves as representatives of the Small Business Administration, the independent federal agency whose job it is ‘to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters.’ 

The imposters then pump the small business owner for information that can later be used to impersonate both him and his business. If the contact is made by email, malware can be implanted in the small business’ computer network that will enable the scammer to access everything that’s stored inside it. Scammers have even used such information to obtain coronavirus emergency loans from the Small Business Administration in the name of the scammed small business, hoping that it will be stuck having to repay it. Coronavirus-related small business scams have been reported in Australia as well.    

If you think you’ve been the victim of a small business scam, contact the fund recovery experts at MyChargeBack.