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Small Business Scams to Watch Out for During COVID-19

scam alert notice
July 31 2020 • by Deirdre Jannerelli • Business, Security

Fraud of all types is on the rise during the coronavirus pandemic, and small businesses have become a favorite target of scammers. Criminals are preying on vulnerable business owners who are overwhelmed with trying to keep their companies alive. It’s vitally important for business owners to stay vigilant and alert during these times so that they can spot COVID-19 scams before they fall victim to them. Let’s take a look at some of the recent scams targeting small businesses:

Loan & Grant Scams – In these types of scams, crooks claiming to be from a financial institution, the SBA, or a local or federal entity, contact a business owner directly with an offer of a loan or grant. They request personal and financial information, and typically some form of advance payment, in order to complete the funding process. Be wary of any unsolicited phone calls, emails, or text messages you receive regarding such funding, and never provide sensitive information to a third-party unless you’re absolutely positive that they are who they say they are, and unless there is a legitimate reason for you to do so. You should also be suspicious of anyone claiming that you’ve been approved for a loan or grant that you haven’t applied for.

Phishing Scams – All business owners should also be on the lookout for phishing emails and phone calls, especially if they’ve already applied for a grant or loan. If you’re expecting correspondence from the SBA or your lender regarding a loan application, don’t just assume that every email or call you receive is legitimate. Be sure to check the sender address in your emails to ensure they’re really coming from your lender or the SBA (but be aware that even this isn’t foolproof as the sender address of emails can easily be spoofed), and hover over all email links to ensure they’re pointing to legitimate websites before you click on them, especially if you’re being asked to upload any supporting documents.

Fake Invoice Scams – In this type of scam, criminals send a business phony invoices for products or services that a similar business would commonly use. The hope is that whoever is paying the bills will assume the invoices are real and will pay them; and with so many businesses focusing their time and energy on COVID-related matters, scammers are banking on these fraudulent invoices flying under the radar. Be sure to have a system in place for verifying all invoices that come into your business, and ensure that your accounts payable team knows what services and products are being used on a regular basis. It’s better to have someone question an invoice than to mistakenly pay a fraudulent one.

It’s critically important – now more than ever – for business owners and their employees to not let their guards down. By remaining vigilant during the coronavirus pandemic, you’ll have a better chance of spotting a scam before it does serious damage to your business and finances.