Protect Your Small Business: Smart Anti-Scam Practices Every Owner Should Know
Running a small business involves numerous challenges, including the risk of scams that can drain your resources. Unfortunately, scammers know that small business owners are often busy and may not have formal anti-fraud procedures in place. That makes small businesses attractive targets.
To safeguard your business from potential scams, it's crucial to implement practical measures against common types of fraud, both online and offline.
1. Fake Invoices and Vendor Fraud
One common scam is the bogus invoice: fraudsters send an invoice that looks real but charges for goods or services you never ordered. In some cases, they impersonate a legitimate supplier and change payment instructions.
Best Practices:
Confirm new vendors before placing orders or sending payments.
Verify any changes to payment instructions by contacting a known representative directly.
Keep clear, organized records to compare incoming invoices with actual purchase orders.
2. Business Email Compromise (BEC)
This is a rapidly growing scam. A criminal hacks or spoofs a company email account and requests a wire transfer or payment to a fraudulent account. These emails often appear urgent and legitimate.
Best Practices:
Use strong passwords and enable multi-factor authentication on all business email accounts.
Establish a policy to confirm any changes in payment instructions by phone or video.
Train your team to be cautious with unexpected or urgent payment requests.
3. Payroll and Employee-Related Scams
Scammers sometimes impersonate employees to request changes to direct deposit information. In other cases, businesses end up paying wages to “ghost employees” who do not exist.
Best Practices:
Require employees to submit changes to payroll details in writing and verify them in person or by a known phone number.
Periodically cross-check your payroll records against your actual employee roster.
4. Impersonation: Fake IRS or Tech Support Calls
Scammers may call pretending to be from the IRS, your bank, or a well-known software provider. These calls often demand urgent action or payment.
Best Practices:
Do not trust unsolicited calls requesting sensitive information or payments.
Hang up and call the organization back using an official, published number.
Remember: the IRS does not demand immediate payment over the phone or ask for payment by gift card.
5. Online Storefront or Marketplace Scams
If you sell online, you may encounter fake orders, fraudulent chargebacks, or phishing attempts posing as your e-commerce platform.
Best Practices:
Watch for unusually large or suspicious orders, especially from new customers.
Require verified payment methods and shipping addresses.
Familiarize yourself with the official communication channels for your sales platform and verify requests independently.
6. In-Person Cons and Unsolicited Sales
Some scams happen the old-fashioned way. An individual may show up unannounced offering discounted office supplies or claiming they need to “inspect” equipment — then you receive a surprise invoice.
Best Practices:
Train your employees to refer all unexpected sales or inspection requests to a designated decision-maker.
Post clear policies for accepting deliveries, visitors, and salespeople.
7. Deceptive Charges for Free or Low-Cost Essentials
Many small business owners receive official-looking notices demanding payment for things they could obtain for free. Common examples include:
Fees for an Employer Identification Number (EIN), which is free when obtained directly from the IRS.
Labor law posters, which are often available at no charge through your state labor department.
Bogus trademark or domain name registration services.
Best Practices:
Always confirm payment requests with the relevant government agency or a trusted advisor.
Be wary of urgent or threatening language in mail or emails claiming “immediate compliance” is required.
Keep a list of legitimate regulatory costs so you know what to expect.
Implementing General Anti-Scam Habits
While each type of scam works a little differently, they all succeed by taking advantage of gaps in everyday processes — whether it’s a missing double-check, unclear responsibilities, or not knowing what to expect when dealing with government agencies. That’s why good anti-scam habits are not just about spotting fraud once it happens, but about setting up clear, repeatable practices that make your business harder to trick in the first place.
Strengthen Your Defenses
Here are some practical, general anti-scam habits that every small business should have in place:
✔ Educate your team. A quick briefing on common scams is better than no training at all.
✔ Secure your systems. Use strong passwords and multi-factor authentication on email, banking, and accounting software.
✔ Segregate financial duties. Ideally, separate who places orders, approves invoices, and reconciles accounts.
✔ Reconcile regularly. Up-to-date books are one of the best early warning systems for fraud or suspicious activity.
✔ Verify unusual requests. Take the extra time to call trusted contacts if something seems out of the ordinary.
✔ Work with reputable vendors and banks. Strong fraud detection systems add another layer of protection.
✔ Stay skeptical. When in doubt, slow down. Scammers rely on urgency to push you into mistakes.
Conclusion
No business is too small to be targeted. Scams thrive on distraction, urgency, and gaps in your processes. A few clear procedures and good communication with your team can make it much harder to fool you.
If you ever receive a suspicious invoice or unexpected payment request, check your records — and don’t hesitate to reach out to your bookkeeper or accountant. Vigilance today can save you the headache and financial hit tomorrow.
© 2025 by Scott Denis. This work is licensed under CC BY-NC-SA 4.0.