10 ways that scammers will try to sink your business

You may think that you are too savvy for your business to become the victim of a scam, but new figures show that instances of fraud are surprisingly widespread.

The Australian Competition and Consumer Commission received 83,150 reports of scams from small businesses and consumers in 2011, resulting in losses of $85 million. 

This figure is up 35% on the previous year, with half of Australian small businesses estimated to have fallen foul of confidence tricksters and hackers.

Unexpectedly, the number of online scams has decreased, with fraudsters switching their attention to text messages and email.

So, what are the scams that you need to keep an eye out for? We’ve outlined the 10 scams that are causing most grief to businesses today.

1. Advance fee/upfront payment scams

It’s not exactly new or innovative, but the tactic of getting businesses and individuals to pay upfront fees in return for a promise of future work that never takes place is the leading type of scam in Australia.

The ACCC says that more than 30,000 scams of this nature were reported last year, accounting for a whopping 36% of all fraud activity.

Businesses usually ask for upfront payment entirely innocently, but if someone is offering you work in return for your own money being stumped up to “cover costs”, be wary.

“Remember there are no get-rich-quick schemes,” the ACCC advises. “The only people who make money are the scammers. Exercise extreme caution when offered investment opportunities, especially if you receive an unsolicited email and/or call.”

2. Computer hacking scams

Sadly, it’s not just high profile hackers such as the Anonymous group that cause havoc to businesses’ IT systems.

Even a relatively novice scammer can strip you of your personal details, contacts and bank details by getting access to your computer.

Having the correct security measures in place, as well as proper back-ups if information is wiped, is essential, but also watch out for people who want remote access to your computer for some spurious reason.

There were more than 19,000 of these scams last year, representing 23.4% of the total number.

3. Lottery and sweepstake scams

You can’t win a lottery unless you buy a ticket. Unfortunately, this rather basic fact seems to have escaped many Australians, with more than 7000 of them falling foul of lottery scams last year.

The premise is simple. Scammers claiming to be from a body such as the International Lotto Commission or Spanish moneypots Loteria Primitiva and El Gordo will tell you that you’ve won a sizeable sum of money, only to ask for your details to process the winnings. Don’t do it.

4. Banking and online account scams

Banking scams take many forms – sometimes, fraudsters will use Spyware technology to access your details or take the trouble to clone or “skim” your credit card.

The lesson is simple – don’t give your details out freely and always check who has access to your credit cards and online banking. There were 5430 of these scams reported last year.

5. Online auction and shopping scams

With the rise of online shopping in Australia, the scammers have swooped. More than 5000 people were dudded by eCommerce rorts last year.

Fraudsters often offer a product at a very low price, just to get your credit card details. Or they will rig an auction, such as on eBay, so that you are left paying over the odds for a product that never arrives.

Only make purchases from trusted sites and be wary of unsolicited offers and demands for immediate payment. Conversely, if your business sells online, strive to reassure customers that you won’t run off with their money.