Common Business Scams and How to Protect Your Company
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Fraud isn’t just a personal risk—it’s a growing threat to businesses as well. At Members 1st, we want our business members to be informed and prepared. Knowing what scams are out there and how they work is the first step to protect your company.
Two of the most common scams impacting businesses today include business email compromise (BEC)/phishing attacks and fake invoices. In addition to these, scammers are always finding new ways to target businesses, so staying alert is key.
Business Email Compromise and Phishing
A business email compromise scam occurs when someone impersonates a trusted contact, like a vendor or even a colleague, to trick your team into transferring money or sharing sensitive information. Phishing is similar, often appearing as emails or texts that look official but contain links or attachments designed to steal credentials or install malware.
Key tactics scammers use:
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Pretending to be someone you trust.
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Creating urgency or fear to prompt quick action.
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Requesting payment through wire transfer or gift cards.
How to protect your business:
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Train employees to verify unexpected requests before acting.
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Require two-person approval for payment changes or large transactions.
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Avoid sending sensitive information via email.
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Double-check email addresses and suspicious links and be cautious before opening attachments or clicking links you weren’t expecting.
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Keep systems and security tools updated.
If a request feels off, it probably is. A quick phone call to the sender using a known number can save your business from a major loss.
Fake Invoices and Unordered Merchandise
Scammers often send invoices for products or services your business never ordered. Sometimes they go as far as shipping the items to pressure you into paying. These invoices can look very convincing but paying for goods or services you didn’t request is not required.
Tips to avoid falling for invoice scams:
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Verify every invoice against purchase orders or agreements.
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Pay attention to unusual payment requests, especially things like wire transfers or gift cards.
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Require two-person approval for payment changes or large transactions.
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Utilize digital banking to manage who sees and performs transactions within your organization. The right platform will empower you with specialized reporting tools that make monitoring activity straightforward, along with customizable alerts and notifications to keep you informed about every important action.
Other Scams Businesses Should Watch For
Fraudsters don’t stop at email and invoices. Some common threats include:
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Business or government impersonation: Scammers may threaten fines, suspension of licenses or fake “urgent” fees.
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Tech support scams: These can be calls or pop-ups claiming your business’ systems are at risk, asking for payment or remote access.
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Social engineering and ransomware: Fraudsters may use fake emails, phone calls or social media messages to steal information. In ransomware attacks, they can lock your systems or data and demand payment to restore access.
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Business coaching or grant scams: Offers that promise guaranteed returns or exclusive opportunities, often requiring significant upfront fees, but deliver little to no value.
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Fake check scams and credit card processing schemes: Overpayments or misleading contracts designed to take your money.
For a full guide on common business scams and how to stay protected, the Federal Trade Commission (FTC) offers resources tailored for small businesses and nonprofits.
Your Best Defense is Awareness
While scammers continue to evolve their tactics, many fraud attempts can be prevented with strong security habits and an informed team. Members 1st offers a Cybersecurity Awareness Checklist with practical steps to help individuals and businesses stay protected. Download it for quick tips and reminders you can easily share with your team.
Encourage employees to stay vigilant by questioning unexpected requests and verifying vendors and invoices. These simple habits can make a big difference. It’s also essential to use strong security features in your online banking to help protect your business from threats and unauthorized activity. By using the right tools, you’re taking proactive steps to secure your operations and maintain control.
At Members 1st, we’re here to help you navigate financial decisions safely and provide guidance to protect your business. Together, we can help keep your business secure and thriving.
