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Avoiding business scams

January 27, 2020

What defines a scam?

Whether you’re a sole trader or are part of a larger corporation, the likelihood is that at some point or another, your business will be the target of a scam. Put simply; a scam is a dishonest or fraudulent scheme designed to gather either funds or information from a person or business. With the ever-increasing popularity of the internet, it has become easier than ever before to fall victim to the increasingly clever techniques that scammers are using. We have no doubt that almost everybody will have come across such a scam at one point or another, whether as a business or as a customer. It’s now more important than ever to be aware of the risks and to understand how to prevent being targetted by these outrageous schemes.

We have put together this article to help businesses to understand their own vulnerabilities, which will, in turn, enable them to recognise a scam from the beginning and therefore avoid being caught out.

What types of scam might your business be targetted by?

As the days go by, scammers are becoming more intelligent and are finding more ways than ever before to convince businesses to fall for their horrific schemes. With technology being so prominent in our lives, these scammers will go to endless lengths to disguise their schemes as being legitimate causes.

There is a wide range of scams which are targeted to businesses, where often scammers will intentionally use misleading sales techniques to persuade business owners to part with their money. Whether they have been convinced to purchase unnecessary goods and services, or are taken unaware by common advertising or directory scams. Whatever the scheme is, it can be so easy to be lulled into a false sense of security by their convincing methods, or feel pressured by their persistent sales pitches. Being aware of these scams in the first place can help you to understand how to avoid these issues.

One of the most common ways to target businesses these days is via their emails. These have come a long way from old, obviously, spam emails. With the unfortunate help of modern technology, it has become increasingly easy for con artists to create emails which appear to be sent from a reputable organisation, such as a bank or credit card company or even a scam prevention

Take precautions to avoid falling foul to fraud

We advise all businesses to take any necessary precautions against any potential or future fraudulent activity, to prevent it from happening and affecting businesses in the first place. It is not enough to just be reactive once an issue occurs, as by this point it could be too late, and your business may have been scammed out of large sums of money or other valuables.

As businesses, we have a duty of care to our customers to ensure that any of their details are kept securely to avoid compromising their privacy in any way. It is also a legal requirement that any data collected is handled in the correct way, to meet recent GDPR requirements.

Avoiding getting caught out by email phishing scams

Business owners and customers alike should be wary of emails which do not address them by their proper name. Should emails greet you using generic phrases such as ‘Dear customer’ or do not appear to be signed off in the usual way, you should be cautious. You should also always be wary of any emails which request any of your personal information, whether it is a username, password, bank detail or anything else. Even things which may seem innocent may be capturing information when you least suspect it, for example, the answers to your password reset questions.

Remember, do not forward or open any emails which you suspect may be part of a scam and if in doubt, never click on a link in an email where you do not know or trust the original source. The simplest solution in many cases is to call the company in question – not using any phone numbers included in these emails, but finding them from official sources instead, to confirm any information is correct.

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Protecting yourselves and your customers from financial scams

It is important for businesses to implement certain systems which could help to prevent these types of things from happening. One idea which has proven to be successful by many businesses is to have a system where customers make a small deposit (usually under £1) into the necessary bank account, before making the full payment of an invoice. This will allow them the opportunity to call your company and ask for confirmation of the amount that has been paid in. This simple step takes just a few extra minutes and yet could save you a lot of time and money in the long run. Once you have confirmed that the bank account details are correct and that the invoice amount due is accurate, customers can pay the outstanding balance.

This not only works well for businesses to implement to their customers when invoicing but also for trades to pay their suppliers in this way too. Any reputable business will thoroughly understand your reasoning and should be more than happy to play ball.

Remember to report any suspicious activity

If you have received any worrying letters, emails or other messages or have come across any other suspicious behaviour, it’s essential to report it. Businesses will not want their name tarnished, and so you should make them aware of any scams which are being masked to look as if from them so that they can make their other customers aware. You should also inform the authorities of any suspicious behaviour.

What if I have been a victim of fraudulent activity?

In the unfortunate circumstance that you or one of your customers have fallen foul to fraudulent activity, there are specific steps that you should take. Report any cases where you have been conned out of money to your local authority; make sure to keep all evidence relating to the situation, including any emails or letters to have a paper trail. Note down any information which may be relevant as soon as possible, while it’s still fresh in mind. Remember to keep calm, as it can be all too easy to become stressed over a situation which may be solved quite easily. Speak to your bank as soon as possible to see if they can reverse any payments or trace where the money has gone.

We would advise that anybody in this situation should also speak to Citizens Advice and seek legal aid.

Get more useful business advice from Checkatrade

One of our highly valued Checkatrade Members Jordon Farley of Artisan Electrics shares his insights into how to detect, avoid and report scam emails. We highly recommend watching this video it just might stop you from becoming caught by a scammer! Need to report a phishing scam? Please go here.

If you found this article useful, or have any other questions relating to running your business, take a look at our exclusive members’ area where our team of experts will be able to provide you with even more top tips to help your business to succeed.

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