Scams That Target Small Businesses: Ways to Protect Your Company
January 19, 2016
Posted by JD Stride

Small businesses and start-ups are the target of most online scams due to their high level of vulnerability and low security.

Most Common Scams to Avoid

Below is a list of scams that are most likely to happen among your business.

The Directory Scam

One of the most common scams today is the directory scam. This is when a business receives an email, direct mail, or fax advertising a listing in a fake directory. Once the order is completed, even if the listing is ‘free’, the fine print will read that the business billing information will be used to fund an expensive and recurring bill. This fake directory will also threaten you to involve legal action if the funds are not paid.

The Over-Paying Customer

When a customer calls or emails to notify you that they’ve overpaid for your product or services, it may seem like a harmless mistake on their part. That is, until they ask for the difference back in a refund. The amount that the customer claims to be overpaid is always substantially high. This high amount is paid through a stolen credit card or insufficient check. Now, not only is your business paying for funds that may not clear through check or credit card, you are also helping a criminal steal a victim’s hard earned money.

A customer may have actually overpaid by mistake and wants a refund, so it is best to ensure the customer is lying before taking negative action and harming your customer service rating and reputation.

The best practice is to always replace funds on the credit card, bank account, or check of the original purchase. Always confirm customer information such as address, date of birth, and SSN for verification when offering a refund.


Tips to Avoid Scams

No business is 100% safeguarded from scams especially with the rise of criminal acts. There are a few tips you can follow to lower your chances of being attacked.

  • Protect all of your secure information properly
  • Maintain records of all purchases by customers
  • Keep an organized file of important customer information
  • Initiate incentives to employees who help prevent scam
  • Set up a system for employees and customers to easily notify you of suspicious and criminal behavior
  • Provide your customers with secure online checkout
  • Inform your employees on the most common scams
  • Only purchase from suppliers with a high level of trust or reputation
  • Only allow your most trusted employees to handle information or make important business purchases
  • Monitor and handle each customer service email or call with care


Having repetitive scams to hit your business can eventually lose your trust with your customers, and make you file for bankruptcy. It is best to learn the basics now and become prepared so the consequences are less severe in the long run.

Now is a good time to finally secure and organize the information security in your business.

InConfidence takes various precautions that can prevent your business from becoming a victim to the differentiating online scams and their impacts.