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Did you know that one out of three frauds target small businesses? Call For Action (CFA), an international network of hotlines affiliated with local television and radio stations, helps solve small business and consumer problems. CFA has published a brochure, Small Businesses Targeted by Big Scams: How to Survive Scams, Schemes, and Techno-Frauds!, that identifies and explains common frauds and provides tips for fighting back.
Common schemes include:
- Internet fraud: An e-mail message threatens legal action unless you make payment on an overdue account; hackers change information on Websites; technically savvy thieves break into servers to redirect shipments and steal your company’s critical information.
- Phone service scams: Trespassers access your voice mail system and place unauthorized long distance calls.
- Business opportunity frauds: You are presented with a business opportunity to invest in a display rack or vending machine business selling computer software or prepaid phone cards with no information about where these racks or machines will be placed.
- Financial services scams: After offering you a guaranteed loan with an up-front fee, an operator takes your money and scrams.
- Office equipment and supply scams: Individuals posing as repair or service reps enter your establishment and steal or switch copiers, fax machines and other equipment.
To protect yourself from fraudulent schemes, follow these tips:
- Check references carefully.
- Avoid making on-the-spot decisions about business deals.
- Obtain all offers and agreements in writing before money is exchanged.
- Never pay lump sums of cash before receiving products or services.
- Before signing a franchise agreement, carefully read the Federal Trade Commission’s Franchise Rule (www.ftc.gov or 202-FTC-HELP).
- If you do business overseas, be wary of scams and schemes.
- Inform employees about scams so they’ll know what to look for and how to react.
- Carefully inspect your invoices and credit card statements before sending payment. Also, check that no statements are missing.
- Before purchasing products or services online, investigate the company. Make sure your transaction is secured by installing security software.
To order this brochure, contact CFA at 800-647-1756 or send a self-addressed, legal-size envelope to Call For Action, 5272 River Rd., Suite 300, Bethesda, MD 20816.