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Avoid Utility and Other Scams


“Pay now or lights out for your business!” Don’t believe it. Scammers pretend to be utility companies and tell you to pay immediately or lose power. Just hang up! Learn more about how to spot #smallbiz scams: https://go.usa.gov/xQusJ #SmallBizScams101.

SCAMMERS’ TACTICS

  • Scammers pretend to be someone you trust. They make themselves seem believable by pretending to be connected with a company you know or a government agency.

  • Scammers create a sense of urgency. They rush you into making a quick decision before you look into it.

  • Scammers use intimidation and fear. They tell you that something terrible is about to happen to get you to send a payment before you have a chance to check out their claims.

  • Scammers use untraceable payment methods. They often want payment through wire transfers, reloadable cards, or gift cards that are nearly impossible to reverse or track.

HOW CAN I PROTECT MY BUSINESS?

  • Train Your Employees

  • Your best defense is an informed workforce. Explain to your staff how scams happen and share this brochure with them. Order free copies at FTC.gov/Bulkorder.

  • Encourage people to talk with their coworkers if they spot a scam. Scammers often target multiple people in an organization, so an alert from one employee about a scam can help prevent others from being deceived.

  • Train employees not to send passwords or sensitive information by email, even if the email seems to come from a manager. Then stick with the program — don’t ever ask for sensitive data from employees by email.

Verify Invoices and Payments
  • Check all invoices closely. Never pay unless you know the bill is for items that were actually ordered and delivered. Tell your staff to do the same.

  • Make sure procedures are clear for approving invoices or expenditures. To reduce the risk of a costly mistake, limit the number of people who are authorized to place orders and pay invoices. Review your procedures to make sure major spending can’t be triggered by an unexpected call, email, or invoice.

  • Pay attention to how someone asks you to pay. Tell your staff to do the same. If you are asked to pay with a wire transfer, reloadable card, or gift card, you can bet it’s a scam.

Be Tech-Savvy
  • Don’t believe your caller ID. Imposters often fake caller ID information so you’ll be more likely to believe them when they claim to be a government agency or a vendor you trust.

  • Remember that email addresses and websites that look legitimate are easy for scammers to fake. Stop and think about whether it could be a scam before you click. Scammers even can hack into the social media accounts of people you trust and send you messages that appear to be from them. Don’t open attachments or download files from unexpected emails; they may have viruses that can harm your computer.

  • Secure your organization’s files, passwords, and financial information. For more information about protecting your small business or non-profit organization’s computer system, check out the FTC’s Small Business Computer Security Basics at FTC.gov/SmallBusiness.

Know Who You’re Dealing With
  • Before doing business with a new company, search the company’s name online with the term “scam” or “complaint.” Read what others are saying about that company.

  • When it comes to products and services for your business, ask for recommendations from other business owners in your community. Positive word-of-mouth from trustworthy people is more reliable than any sales pitch.

  • Don’t pay for “free” information. You may be able to get truly free business development advice and counseling through programs like SCORE.org.

COMMON SCAMS THAT TARGET SMALL BUSINESS

Fake Invoices

Scammers create phony invoices that look like they’re for products or services your business uses — maybe office or cleaning supplies or domain name registrations. Scammers hope the person who pays your bills will assume the invoices are for things the company actually ordered. Scammers know that when the invoice is for something critical, like keeping your website up and running, you may pay first and ask questions later. Except it’s all fake, and if you pay, your money may be gone.

Unordered Office Supplies and Other Products

Someone calls to confirm an existing order of office supplies or other merchandise, verify an address, or offer a free catalog or sample. If you say yes, then comes the surprise — unordered merchandise arrives at your doorstep, followed by high-pressure demands to pay for it. If you don’t pay, the scammer may even play back a tape of the earlier call as “proof” that the order was placed. Keep in mind that if you receive merchandise you didn’t order, you have a legal right to keep it for free.

Directory Listing and Advertising Scams

Con artists try to fool you into paying for nonexistent advertising or a listing in a nonexistent directory. They often pretend to be

from the Yellow Pages. They may ask you to provide contact information for a “free” listing or say the call is simply to confirm your information for an existing order. Later, you’ll get a big bill, and the scamm