Businesses tend to be a popular target for fraudsters. Here are just 5 types of fraud to be wary of.
Fraud is any kind of deception that is used to unlawfully earn money or gain access to sensitive information. Businesses tend to be a popular target for fraudsters – especially startups that are often less savvy to such tricks. There are many different forms of fraud. Here are just 5 types of fraud to be particularly wary of.
Business identity theft
Business identity theft is when another business or individual poses as your company. The purpose of this could be to damage your company reputation, or it could be to steal customers. There are many ways in which you can stop fraudsters from stealing your identity. Trademarking your brand and using Copyscape to check for clone websites can help you to bring down fraudsters imitating your brand. As for fraudsters stealing financial details, you should get into a habit of shredding any sensitive documents before disposing of them, as well as switching to digital bank statements.
Personal injury fraud
This type of fraud involves people feigning injury in order to extort compensation from your business. This could include a customer pretending to slip on a wet floor or even a third-party setting up a car accident in which it looks like you were in the wrong (also insurance fraud). Surveillance is a great way of preventing this type of fraud – you can usually use CCTV to spot when someone has faked a fall or you can use a dash cam to spot an accident that has been clearly set up. It’s worth also protecting yourself with signage of hazards, no matter how obvious.
Invoice fraud
Invoice fraud is when a criminal sends you an invoice while pretending to be a supplier. This could be an energy provider or an insurer or someone you order tools from. The criminal may even match the exact invoice layout used by your real supplier. To ensure that you’re paying the right person, always double-check the email address and the account details of the supplier. If you have any suspicions, it could even be worth ringing up the supplier to check that they did indeed send an invoice.
Photo by Luca Bravo on Unsplash
Tax refund phishing
Some fraudsters may also pose as IRS as a way of extorting money and personal information from you. Such fraudsters usually send an email that claims you are due a tax refund. They’ll then usually get you to ring up on a fake number and then ask you to confirm your personal details in order to send the refund over. Try to always be suspicious of such requests and get in contact with the real IRS to confirm that the refund is legitimate (usually they will tell you via printed letter and not merely by email).
Business directory fraud
There are also fraudsters out there that will extort money from you by pretending to run a business directory. They may ring you up and claim that they can get you an ad pride of place. Often no actual business directory exists. All in all, you should never agree to sign up to anything being sold to you rover the phone.
