Small businesses are at an increased risk for fraud, research has found. According to a study conducted by Javelin Strategy and Research, small-business owners experience fraud at a rate that is double the rate of non-business owners. Some of these scams dupe small-business owners because they are wrapped up in offers of money-saving deals that can help stretch a budget a little further. In the course of finding the best deals, however, you want to avoid any cleverly disguised scams.
Here are four common small-business scams to watch out for:
- Fake Invoices — As we’ve noted before, con artists know that small-business owners tend to deal with lots of vendors. They may try to take advantage of this by slipping you an invoice or a renewal notice for a product or a service that you’ve never received. To avoid these phony bills, set up a system for comparing all incoming invoices to your records (of work completed or goods received) before you make any payments. Keep track of what you’ve paid, too. If you receive a suspicious invoice, report it to your state’s attorney general.
- Fake Directory Listings — Businesses used to pay to be listed in the phone book and other printed directories, a practice that now extends to web-based directories. Scammers often target small businesses by submitting invoices or making phone solicitations for bogus directory listings that seem real. Before agreeing to any listing or paying for it, research the directory online. The National Consumers League offers a few tips to help spot fraudulent directory invoices, too.
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