The 4 Scams Entrepreneurs Need to Know About - Exclusively In Brainz Magazine

It was late on a Friday afternoon when Jo Blood received an alert that a new advert had been approved for her Facebook business’ account. “I thought it was odd as I hadn’t set one up, so I logged on and saw all these adverts with budgets of about £50,000 per day,” she recounts adding: “Trust me we don’t spend anywhere near that amount.”

What followed was a frantic few hours in which Blood changed the password but the scammers kept coming at her. They were locked in a battle as she turned ads off and they turned them back on again. She shares: “What I hadn’t realised is that even if you change the password, there is a setting you need to activate to sign out of everywhere – and this option was really hidden. Luckily, my IT company was still working and could talk me through how to lock the scammers out of the account.”

Blood runs Posture People, an ergonomic office furniture and accessories company based in the South East of England. She admits that her confidence has been dented by the incident as she always believed herself to be savvy of potential scams. She says: “The stupid thing is that they gained nothing by it – they couldn’t have got the money out of the account as getting money out of Facebook is like getting blood out of a stone. It was purely malicious. We’ve also had a separate attack on our website – where someone just bombarded it with orders – which were failing, but it was also stopping our actual customers ordering.”

And here is the crux of the issue. The majority of scams are intended to extract money quickly but some are disruptive and see businesses held to ransom for hours, days or weeks. From hacking to phishing, here are four scams that entrepreneurs need to know about.

1. Identity theft

What Blood experienced was a form of identity theft. The scammers hacked her Facebook account and took it over. Identity thieves will scour the web for information about potential victims looking at everything from social media to business websites. People inadvertently share things online including their address; family members’ names or even, believe it or not, passport or driving license numbers.

Be guarded. Never send private information when requested unless you are 100% confident that the request is an authentic one. And make sure that you use strong passwords; shred sensitive documents you no longer need and do not connect to public Wi-Fi hotspots when you are doing anything that is confidential. Educate your team on this constantly.

2. Phishing

Scammers will use every means possible to illicit information from you. It might be a phone call, a text or an email. Whatever the means, it will appear to come from a trustworthy source. It might be, for example, an email that you think has come from your bank, telling you that you have been locked out after an unauthorised log in attempt. You click an innocent looking link only to inadvertently give a scammer access to your computer. It could be an email from what you think is your Broadband provider, asking you to download some new software. It could be an email attachment, which is, in fact, a virus.

There are thousands upon thousands of ways that scammers will try and get you to compromise your information or give remote access to your devices. Always err on the side of hypervigilance; scrutinise email addresses and never share banking log on details or passwords. A genuine bank or service provider won’t mind you double or triple checking. And deploy firewalls, antivirus software and spam filters, which you maintain and test regularly.

3. Fake invoices and push payment fraud

Running a business can be chaotic at times. Scammers take advantage of any moments of slipped attention. A very prolific scheme is the sending of fake invoices created using the details and logos of your genuine suppliers. On days when your attention is being pulled in many directions, it can be easy to miss that something is slightly off.

Not only this, but scammers can also intercept your emails and send your customers a fraudulent push payment demand pretending to be you. In a crafted message that will look just like something your company would send, they inform your customers that the business bank details have changed and they must update where their payments go accordingly.

The key to combatting this form of scam is having a strict protocol in place for processing invoices that everyone abides by. That and double-checking before a payment is made.

4. Investment or opportunity scams

When you are the founder of a business, someone reaching out to you with a business opportunity can feel flattering. If this opportunity is being sold as one that will deliver quick returns, it is even more attractive especially if your venture is new and in need of capital.

But, if it sounds too good to be true, it probably is. That legitimate-sounding franchise scheme isn’t going to deliver anything but heartache; and that investment company with sleek marketing is nothing but a front for criminals.

Research any offer with a sceptical lens; seek independent reviews and seek the advice of third parties who you trust and know will be objective and honest.

The scams currently being used are manifold; deployed relentlessly and evolving. PwC surveyed 1,296 executives across 53 countries last year and found that 51 percent of those surveyed had experienced fraud in the past two years. This was the highest level in 20 years of research.

This makes for frightening reading. Educating yourself, your team and your clients on the changing threats is essential; as is remaining vigilant; engaging with your entrepreneurial community and making sure that you use technology to best effect. There is always more you can do to make sure you protect everything you have worked so hard for.