Scammers spend an excessive amount of time and effort devising schemes to defraud individuals, leading me to wonder why they don’t simply “get a job.”
Unfortunately, the answer lies in the fact that their scams actually work.
In 2022, Americans lost a staggering $8.8 billion to scams, according to AARP. Furthermore, businesses have suffered even greater losses due to various fraudulent activities. The FBI Internet Crime Complaint Center reported that “business email compromise” alone resulted in over $83 billion in losses in the same year.
These scams can range from small-scale to catastrophic. As a business owner, it’s crucial to be aware of these scams and take necessary precautions.
“Slip and fall” fraud
Although it may seem outdated compared to cybercrimes, fake “falls” followed by lawsuits for soft tissue damage (which doesn’t show up on an x-ray) still occur. Installing cameras and ensuring adequate insurance coverage are essential.
Phishing email scams
Last week’s article discussed email phishing scams, which also target businesses. My office receives several of these scams on a weekly basis.
Oftentimes, the attachment in these emails claims to be a late bill, a “settlement proposal” (knowing they’re contacting a law office), or an invoice. These attachments come from unfamiliar email addresses like wsjjhgeku771623xii8@aol but may have a name that’s similar to mine or a legitimate company with a slight variation (e.g., PGElectric instead of PG&E).
It is highly likely that these attachments contain malware, ransomware, viruses, or attempts to obtain personal information or passwords. As a result, we block and delete these emails without opening any attachments.
Everyone in my office is vigilant and knows not to open attachments from unknown senders. Additionally, we utilize a secure portal for sending and receiving sensitive documents.
Supplies fraud
There are several variations of this scam.
In one scenario, fake invoices are sent with the hope that your accounts payable department won’t notice or that the invoice resembles a company you frequently do business with.
In another situation, someone calls to “remind” you that it’s time to renew your ink or toner or some other office supply order. If you agree, unordered (and typically cheap) supplies will be delivered along with a hefty bill. Before agreeing, make sure you are familiar with the company and its legitimacy.
If you have any doubts, hang up, check the bill from your regular supplier, and contact them using the number provided on the bill.
By the way, if you receive products you didn’t order, the Federal Trade Commission says you have the right to keep and use the products without making any payment.
Impersonating the government
The scams falling under this category come in various forms, mirroring numerous governmental entities, if not more. These scams may include:
– Attempts to sell you “workplace compliance posters” that are actually available for free from the Department of Labor.
– Attempts to convince you to pay hundreds of dollars for “corporate compliance documents” that may not be required for your business or that you can easily file for online through the secretary of state within minutes. Moreover, they may ask for information that can be used in future scams, such as tax ID numbers. These letters often appear government-related, bearing names like “California Corporate Compliance,” but they usually contain small print disclaiming any affiliation with the government.
– Threats to disconnect your utilities if immediate payment is not made. In such cases, it is advisable to hang up and contact the utility company directly if you are concerned about missed bills.
– Impersonation of the IRS, the “Revenue Service,” or the “California Tax Authority” with threats to shut down your business due to late tax payments. (Keep in mind that the IRS and the California FTB send multiple written notices before taking legal action, and they do not communicate via email.)
– Solicitations to “register” your trademark or copyright with a registry that either does not exist or solely targets unfortunate victims who paid for it. If you obtained a trademark, you already registered it with the US Patent and Trademark Office during the process.
Manipulating online reviews
In this scam, individuals offer to remove negative or lukewarm online reviews and replace them with positive reviews for a significant fee. However, posting fake reviews is illegal.
According to FTC guidelines, reviews must genuinely reflect the opinion and experience of the reviewer. Engaging in such practices can have legal consequences.
Vanity awards
You receive an exciting notification that you have been selected as one of “America’s Top 100 Best Looking CEOs” or bestowed some other random award from a supposedly esteemed publication.
Subsequently, they request payment for a plaque, prominent inclusion in their “program” or “magazine,” and multiple copies to distribute to friends and clients. Before you know it, your desire for recognition has cost you hundreds, if not thousands, of dollars.
Later on, you discover that the publication either does not exist or is only circulated among you and other victims of this fraudulent scheme. If you haven’t heard of the publication, chances are your customers or clients haven’t either. Furthermore, if they are asking for payment, they are not genuinely honoring you. Nevertheless, we think you’re good looking.
Gift and debit cards
If you are asked to pay a supposed debt using gift cards, Visa cards, or even cryptocurrency, it is highly likely that it is a scam. Legitimate entities, including the IRS and reputable businesses, do not accept payment in gift cards.
The Federal Trade Commission provides a brochure titled “Scams and Your Small Business: A Guide for Business” that can assist you and your employees in recognizing these schemes. Stay vigilant, verify the true origins of emails and phone calls, and trust your instincts. These fraudsters spend their time inventing new scams, as they lack real jobs.
Teresa J. Rhyne is an attorney specializing in estate planning and trust administration in Riverside and Paso Robles, CA. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” You can reach her via email at [email protected]
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