A recent law enforcement initiative led to 24 actions against individuals or groups who were allegedly attempting to scam small businesses.
The results from Operation Main Street: Stopping Small Business Scams were recently revealed in a joint announcement from the Federal Trade Commission, the offices of eight state attorneys general, two U.S. Attorneys’ Offices, the U.S. Postal Inspection Service’s New York Division, and the Better Business Bureau (BBB).
“Scams are a significant – and growing – problem for small businesses,” Beverly Baskin, President and CEO for the Council of Better Business Bureaus, said in a press release. “Nearly two-thirds of those we surveyed said their business had been targeted by a scammer in the past three years, and many said that their businesses suffered a loss of consumer trust as a result.”
What the Alleged Scams Entailed
The scams perpetrated against small businesses can chip away at the profits of the businesses, which can be catastrophic for their bottom line, especially considering that a large percentage of new small businesses will fail anyway. Maintaining a steady flow of capital is imperative for any small business, which is why small business loans have become quite popular amongst aspiring entrepreneurs.
There are many ways small businesses can be scammed. In one scam uncovered by Operation Main Street, the scammer attempted to charge business owners for office supplies the business owners had never ordered.
In another, small businesses were being charged for samples of cleaning products and other items that were supposed to be free.
Scams involving robocalling were also found during the Operation Main Street investigation. In one scheme, small businesses received robocalls from a source who said they represented Google and would remove the small business from Google searches, then promised prominent placement in Google search results if the businesses paid.
According to the recently-released BBB’s Scams and Your Small Business Research Report, the top scams affecting small businesses are people pretending to be bank or credit card companies, those involving advertising services, fake invoices, false checks, and scams involving tech support. If a small business owner is paying close attention, scams can be snuffed out by noticing the little things like a “lender” only offering a PO Box as their company address.
Of everyone surveyed for this BBB report, 67 percent think scammers present an increasing risk to small business owners. Far less had confidence the threat of scammers had decreased in the past three years – only 3 percent of those surveyed believed that.
The survey respondents didn’t agree on the best way is to protect their businesses, with 38 percent saying the best way is by hearing about a certain type of scam and another 35 percent said it was being informed about the behavior of the scammers and any methods they use. In any case, staying vigilant and avoiding financial scams can help preserve your bottom line. There are a number of unique ways to potentially make more money as a small business owner, including the very fundamental decision of where to locate your business.