Being a business owner entails dealing with dynamic market forces, changing consumer preferences, competition from other businesses, etc., and being creative enough to overcome them. While these challenges make your business stronger, some challenges can turn into nightmares for even the biggest of the companies. We’re talking about a scam.
Scams can be very damaging to financial resources and business reputation. While frauds and scams are not new to the business world, the rise of Artificial Intelligence (AI) has made them even more dangerous.
Let’s understand the common scams and how to protect your business from them in this age of advanced technology and AI.
Five Common Scams You Need to Safeguard Your Business From
Phishing Scam
Phishing has been around for some years now. Still, the advent of AI and its ability to impersonate the voice and even the writing style of a particular individual has made it more potent than ever before. Phishing involves tricking a person into sharing sensitive information by clicking on a bogus website or link from an authentic-looking source. This type of scam has now evolved to spear phishing, which makes businesses more vulnerable.
In a spear phishing scam, a fraudster posing as a business executive — for instance, the CEO of your company – convinces an employee to share confidential business information or even transfer a large sum of money to an account under the pretext of a business deal. Such fraudsters usually create a sense of urgency and confidentiality, making the employees think they are being confided in for a sensitive job. As mentioned above, AI has made imitating voices relatively easy, and many businesses have fallen prey to spear phishing.
Office Supply Scam
This type of scam involves receiving office supplies — such as copier paper, stationery, maintenance equipment, and cleaning supplies — or even just an invoice from what may seem to be the company’s regular vendor or supplier. Such scams usually target new employees or those who might not have in-depth knowledge of the company’s operations. Believing it to be the delivery of a genuine order placed by the company, the employee is baited into sending overpayment to a fake account. Sometimes, if the employee is from another department, they even pay the amount mentioned in the invoice without checking if the supplies have been delivered. Since it is about just office supplies and the amount might not be too large, such scams often go unnoticed for long, ultimately making the business lose money.
Government Grants and Loans Scam
Like the kind of fake calls we receive for personal loans, fraudsters try tricking businesses into thinking they are government officials or representatives of authorized lenders such as banks. They then tell you that your business has been selected for a government grant and ask you to share sensitive information regarding your company for government procedures and compliance purposes. As lenders, they can also claim that a loan you applied for has been granted and that you need to pay upfront fees for application processing or a credit check. A need for urgency will be created to give you no time to verify whether your business even applied for any such loan or grant.
Patents and Trademarks Scam
Businesses owning patents or trademarks for specific products or intellectual property can fall prey to scams wherein you receive a physical letter or email from the Canadian Intellectual Property Office (CIPO) claiming that your trademark or patent is about to expire and has to be renewed immediately by paying a high fee. The communication received often carries a genuine-looking logo and letterhead of CIPO, as well as information about your business that is available in CIPO’s public records to make it look more convincing.
Malware and Ransomware Scam
Highlighting the darker side of technology, such scams catch unsuspecting victims unaware by making them click on (or download content from) malicious links sent from official-looking email addresses with the intent of hacking your business data. Having entered your system, the malware steals and controls all your business data while the ransomware encrypts the data and locks your system. Such data breaches can cost your business heavily.
Prevention Tips to Safeguard from Business Scams
Every person or business is susceptible to such scams. While they cannot be avoided entirely, there are some basic ways to prevent such a scam from wreaking your business:
- Always double-check the logos and letterheads on any communication from so-called government departments or other institutions. Always verify the source of any online communication.
- In case of office supply scams, spear phishing, or grants and loans scams, do not panic if you receive such calls or emails. Do not feel pressured to act right away. Always take the time to verify with the employee, executive, or department concerned.
- Report any fishy or suspicious websites or calls to the department concerned and ensure everyone in the company is alerted.
- Ensure your business has the best possible cyber security measures, including anti-virus and access details, and keep them regularly updated.
- For intellectual property-related suspicions, contact CIPO directly to verify the truth before acting upon it.
The last and most important of all preventive measures is to trust your instincts. If something doesn’t feel right, pause and take a second look at it, even if it looks or sounds authentic. As a business owner, educate employees about these scams and encourage them to look out for any red flags. Set up a communication system that enables employees to share suspicions and verify details internally so that such scams are nipped in the bud. Remember, your business is your child. It’s up to you to make sure it stays safe.
Contact Black and Gill LLP in Etobicoke to Help You Protect Your Business from Scams
Every business is vulnerable to fraud, but an accounting expert is trained to prevent fraud as much as possible. At Black and Gill LLP, our accountants and bookkeepers can help you set up preventative measures and educate you about any scams. To learn more about how Black and Gill LLP can provide you with the best accounting and bookkeeping expertise, contact us online or call us at 416-477-7681.