Identity Security: How to Keep Your Small Business Safe from Scams

scam beware
Image by Stuart Miles
Individual consumers are not the only ones concerned with security measures needed to protect them from identity theft or other types of cyber crime. Small business owners can also be the targets of various scammers.

Starting a new business venture is especially challenging in the beginning and you often want to build a wide network of contacts that can lead to possible future revenue. Scam artists are aware of these networking efforts and take advantage of them by offering various B2B deals that seem beneficial at face value. Their pitches often promise large numbers of leads and clients with little effort on your part. Once they have your business information and credit card number, those promises never materialize.

Several effective methods do exist for verifying that such offers are legitimate and for protecting your business’ reputation.

Trademark Scams

This involves an official-looking letter appearing at your business address, and it warns that your company trademark or website domain is at risk. The letter further instructs you to take some type of immediate action to avoid legal problems. Patent and trademark offices never actually contact individual business owners in this manner, so these letters are best simply ignored. The nature of this scam is to trick you into signing over the rights to your valuable company trademark.

Directory Listing Scams

You receive a phone call or email from an individual claiming to represent a promotional listing company that will add your business information to a nationwide online directory. The scammer promises you large volumes of interested customers and a “free” listing for you as a first-time client. This type of scam can often result in numerous recurring charges on your credit card and even misuse of your company information.

Identity Theft

This problem can result from a data security breach or even a disgruntled former employee. It may not necessarily result in theft of funds from your company, but it can be very harmful to your reputation. The identity thieves usually set up a false online entity with your information and use it to scam payments out of customers who believe they are actually dealing with your business. Once you have this negative mark against your business reputation, it can be very difficult to correct.

How to Check an Offer’s Legitimacy

If a B2B company representative approaches you with offers for financing, directory listings, or another type of offer, the first step is to research that organization’s background thoroughly. Ask the representative for a complete company name, street address, phone number, and email address. If the individual is unable or unwilling to provide that information, this increases the probability that the offer is not legitimate.

Another effective way of uncovering a scam targeting your business is to keep accurate and detailed records of all transactions, including those for purchased supplies. Some scam artists deliberately send out fake invoices to companies for services that were never ordered. Before paying any invoices, have a trusted employee check the invoice against your own financial records. The extra time needed for this verification is a small price to pay for your company’s financial security.

Safeguarding Your Personal and Business Identity

Effective security measures for your small business include using caution when approached with an unsolicited B2B offer, checking invoices against the books, and keeping thorough records. Another recommendation is to install robust enterprise-level antivirus and anti-spyware programs on all office computers. Finally, have open lines of communication with your employees about the various types of business-targeted scams and instruct them on how to spot the signs of a possible attempt at identity theft.

About the Authors: Ryan Ayers is a blogger that writes in the field of identity security. This article was written to explain the possible threats to small businesses and to encourage further study in this field with a Master Degree in Information Assurance.