Scams are a significant and growing problem for small businesses. One of the best ways that small businesses can protect themselves from scams is to stay informed about the common scams circulating and the different techniques used by scammers, and to report them.
One of the most common scams targeting businesses currently that BBB Serving Wisconsin has seen an increase of, is the business email compromise (“BEC”). Also referred to as the payment redirection scam, these are financial scams using the guise of authority to steal money.
We have seen this most recently with the utility scam (callers posing as a local utility company that threaten to turn off power and demand payment) and parish churches (imposters pose as vendors convince a work executive in the finance or accounting department via email to wire transfer money).
“These scams are horrific and can devastate any business,” says Jim Temmer, BBB Serving Wisconsin CEO/president. “What we’ve been seeing is that companies of all sizes are targets, along with increasingly more victims and very large money losses. We all need to help spread the word to business owners and management teams to lessen the chance of more victims falling for these.”
Business Email Compromise (“BEC”). Company personnel with payment authority receive an email that impersonates the CEO or an outside business, asking for payment or noting the necessity to transfer money. Scammers trick the unsuspecting employees and executives and persuade them to wire large amounts of money.
- Keep good records. Keep documentation of all orders and purchases. This will help you to detect bogus accounts and invoices.
- Establish a multi-person approval process for transactions above a certain dollar threshold.
- Never provide personal information or financial details to anyone over the phone that you don’t know.
- Spread the word. If your employees know about the scam, they’ll be more likely to spot it. Tell your colleagues, too.
- Be extra careful with payment procedures. Create rigid payment authorization procedures. Wire transfers, pre-paid debit cards and gift cards are scammers’ preferred methods of payment. Always confirm that any request for payment with untraceable methods such as these – are verified by an authorized source. Also, BBB recommends paying by a written, company check. That way, a paper trail has been created.
- Make sure that the business billing you is a business you’re familiar with and normally do business with. If not, question it. Get the name of the person you speak with, the company name, address, phone and website.
- Do not give out information about your business to anyone, unless you know what the information will be used for.
- If solicited for a product, service or donation, always ask for further information in writing. Also, ask for references, so you may verify with other businesses what their experience is and how long they’ve been doing business with the soliciting company.
- Set clear procedures for the verification, payment and management of all accounts and invoices. Limit the number of employees that are authorized to place orders or pay invoices. Establish a multi-person approval process.
- Make sure you have proper computer protection software and a firewall.
- Don’t click on links inside unsolicited e-mails. They could spread malicious software or viruses.
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