The first day of April is often a day of pranks for the unsuspecting but there are some serious scams around that could easily cost the unwary small business owner dearly. According to the Australian Competition and Consumer Commission (ACCC), almost $85 million was lost in scams in 2015, and that is only what was reported. Forewarned is forearmed so we’ve outlined the top scams that could potentially impact your business, so you don’t get caught out.
Malware is software or a virus is installed on your computer as a result of clicking on a link in an email message or on a social media site. Once your computer is infected, scammers may be able to access your files or see what you are doing on your computer by monitoring your keystrokes. Scammers can then use this information to steal your personal details and either use them to commit fraud or sell them to other scammers. Ransomware is a type of malware that blocks or limits access to your computer or files and the scammer demands a ransom for you to regain access. While the amount may not be large (usually only a few thousand dollars) it is nearly always impossible to have the ‘lock’ removed by anyone other than the scammer as they are the only ones with the encryption code. Of course, once you pay the ransom, there’s no guarantee you will have access to your files but generally you will as the scammer has already moved on to the next victim.
The best form of protection is to not become a victim. Some of the warning signs include:
The best form of protection is to ensure you don’t click on any links from unknown sources or on offers that seem too good to be true. Also keep your antivirus software up to date and ensure all of your data is backed up regularly.
These scams involve scammers claiming to be from Telstra or Microsoft contacting business owners and saying their computer has been sending an error message or has a virus. They may request access to your computer to ‘fix the problem’ and may also try to sell you expensive software or charge a fee for the repairs. While these scammers often sound professional and legitimate, they can become quite abusive, especially if you question their authority. The simplest solution if one of these scammers contacts you is to just hang up the phone.
This scam has been around for a while but it’s still catching out the unwary. Essentially, a business is sent a document that looks like an invoice for listing in a trade directory or to renew a website domain name. They rely on people either not reading the documentation properly (while it may look like an invoice, the document will often say in very fine print that it is just an order or confirmation form) or that the person receiving it isn’t aware of the promotional activities of the business so thinks it’s legitimate. Similarly, the domain name renewal scam relies on people not reading the documentation properly and will be to renew a domain name similar to, but not the same as, your current website, at greatly inflated prices. For instance, it might be missing the .au or be for .net.au instead of .com.au.
Another example is a request from a supplier to change bank account details. The letter or email may look authentic with the appropriate logo and contact details but in fact it’s from a scammer trying to get you to make payments into their bank account. Falling for this scam can not only result in financial losses but can also lead to damaged relationships with your suppliers.
To protect yourself from these types of scams, always read details of any ‘invoices’ or letters from companies you don’t know or recognise. If in doubt, contact the company for more information. Always call your suppliers to check if you receive notifications of a change in bank account details and seek clarification. Ensure you have proper procedures in place to approve any invoices before they are processed for payment. Remember, it’s always better to be safe than sorry.
This is essentially where someone will send you a cheque for an amount over the agreed sale price of an item you are selling. Before the cheque has cleared, the scammer will contact you apologising for the error and ask for a refund of the difference. They will usually request this be made in the form of a bank transfer, preloaded money card or wire transfer service (Western Union seems to be a particular favourite of scammers). Then you find out the cheque has bounced and you will not see your money again. If you have already sent the item sold, you have no chance of it being returned either. To prevent this from happening to you, always ensure any cheques paid are for the correct amount and return any that aren’t. Don’t send any goods sold or process any refunds until they cheque has cleared and the money is in your account.
There are any number of online shopping sites (eBay, Amazon and Alibaba are some of the bigger ones) selling all manner of things, often at much cheaper prices than regular retailers and wholesalers. However, they are also replete with scammers so it’s best to always be ware when dealing with sellers on these sites: if a deal looks too good to be true, it probably is. The scams generally involve advertising something at a super cheap rate, often with fake contact details and seller profiles. When people make an order, either the good won’t arrive at all or it will be vastly inferior to what was described. Some scammers will also add extra charges such as additional shipping and customs fees so that they can fleece the unwary even more.
To avoid being caught out, do your research, make sure you have a good idea of what the item should cost; if the price is too low, alarm bells should ring. Also, make sure you research the company selling the item. Do they have bad reviews? Do they seem legitimate? Have you tried calling the number advertised? Are they vague on any terms and conditions such as warranties, refund policies, etc.? Another clue you may be dealing with a scammer is if they insist on receiving payment via wire transfer (especially Western Union) or via pre-loaded cards. If they aren’t happy to accept payment via conventional methods such as credit card or PayPal, then maybe you should reconsider.
These are some of the more common scams around but, with criminals becoming more sophisticated with their methods, there are many more to be aware of. It always pays to be extra careful especially when dealing with people you don’t know. You can also read our tips about other ways to keep your business secure here. If you do have the unfortunate experience of being caught in a scam, make sure you report it to the ACCC’s ScamWatch so that others can be warned and hopefully ensure it doesn’t happen again.