Are Scams Undermining Your Business

Staying on top of what’s going on within your market is in your best interest and directly affects your bottom line. But what about scams associated with your industry? Are you cued into those cons and do you understand how much they may impact the company you’ve built?

You’ve worked hard to build your business up to where it stands today, and worry about the security of your company. Like many other business owners, you’re often left thinking: “I’m a legitimate business, and I’ve done nothing but hard work to get where I am. Why should scams that occur outside of my business matter to me?”

Whether you or your customers fall for a scam or not, scam artists can damage consumer trust, directly harm your customers and effectively undermine your business.

Scammers attempt to exploit as many people and businesses and as much information as possible. These opportunists specifically target industries that could potentially yield the biggest bang for their buck.

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In the name of maintaining customer trust in your organization, here are some common scams, how to identify them and ways you and your customers can avoid becoming a victim. Be sure to avoid any of these practices while operating your business. The last thing any owner needs is to be wrongfully associated with scams.

Door-to-door marketing — A scammer may conduct surveys, offer home improvement or maintenance services, sell overpriced goods or present themselves under a number of other false pretenses. The person should have proper identification, service certificates and business collateral (business cards, brochures) to prove their legitimacy. References from satisfied customers should also be readily available upon request.

Lodging or rental offers — With all of the lodging scams that have infiltrated the web, a legitimate entity should have a registered business name. In addition, there should be a valid website and phone number attributed to the company’s name. If a business chooses to advertise rental properties on outside sites, customers should be able to validate that the sites are trustworthy. Also be mindful of fraudsters who preying on your business for payment card data. Criminals will pay upfront, cancel and then request a refund to another account.

Donation and charity requests — From health and medical-related organizations to law enforcement, sports teams, schools and even individuals, donations are prevalent in all industries. Unfortunately, with so many false fronts duping generous people out of their money over the years, requests for contributions have nearly become synonymous with scams. Organizations requesting money must be able to prove not only that they are a genuine entity, but also must indicate precisely where the money goes.

Giveaway campaigns — Building rapport with customers comes in many forms — free gifts and prizes, discounts and complimentary services. Just keep in mind that giveaways are a favorite approach of scammers for gathering personal and financial information. A scammer may call, email or mail intended victims to deliver the “great news.” If you host a giveaway, be sure to have written rules, regulations and deadlines that you share with customers. While some prizes that have taxes associated with them, there should never be an advance fee.

Internal errors — There are numerous ways your business can suffer due to mistakes you or your employees make. In many cases, the consequences also hurt your customers. In the past few years, internal errors have often led to business email compromise (BEC). It begins with a basic email that can ultimately give scammers access to financial accounts and personal information of both the business and its customers. The FBI calculated $2.3 billion in losses due to BEC between August 2015 and February 2016 alone.

These five business scam scenarios are only the tip of the iceberg in the sea of scams threatening businesses and consumers alike. Use these examples to know what to look out for to decrease your risk of falling victim to these criminals. If you do become the target of a scam, report it to the FTC at www.ftccomplaintassistant.gov.

Knowing your industry means being aware of the good and the bad, including the downright ugly scams that target the same legitimate people that you serve.

Will being aware of scams change the way you conduct your business?

Source: Business 2 Community