The Federal Trade Commission Provides Guidance to Small Business Owners on Scams
Don Kaiser, CPA
Focused on You. Dedicated to Your Success.
July 30, 2018

The Federal Trade Commission (FTC) has issued guidance for small business owners on how to protect their company from scams. Scam and Your Small Business: A Guide for Business addresses common scammer tactics, targets, and what to do.

According to the FTC, tactics used by scammers to entice small business owners to fall for a fraudulent scheme include:

  • Pretending to be someone you trust.
  • Creating a sense of urgency.
  • Using intimidation and fear.
  • Using untraceable payment methods (wire transfers, reloadable cards or gift cards).

Common scams involve:

  • Fake invoices for products and services that your business uses. This could include everything from office and cleaning supplies or domain name registrations. The scammer hopes that the person paying the bill will not check to see if the company actually ordered the goods or services. Domain name registrations are frequently targeted. Most companies pay the invoice upon receipt to avoid having an issue or losing their website or email address. 
  • Unordered office supplies and other products. The scammer calls to confirm an existing order and asks to verify your mailing address or offers a free sample or catalog. Next thing you know, merchandise that you didn’t order is shipped to your company and you are being pressured to pay for it by the scammer. 
  • Directory listing and advertising. Fraudsters try to convince you to place a listing or advertising in a nonexistent directory. The scammer pretends to be from the Yellow Pages or another credible directory. They will ask you to verify information for a free listing and then send you a bill for paid advertising. Your conversation with the con artists may be recorded and used to pressure you to pay.  
  • Bogus utility company charges. The scammer will call claiming to be from a utility company. They will tell you that your service will be turned off unless you make an immediate payment. The con artist will ask you to pay by wire transfer, reloadable card, or gift card.
  • Government agency imposters. The scammer will pretend to represent the IRS or another government agency. Legal action will be threatened if you don’t pay taxes, renew government licenses or registrations, buy workplace posters (free from the U.S. Department of Labor link to: https://www.dol.gov/general/topics/posters) or deal with something else. Scammers have also been successful convincing business owners to pay for nonexistent grants from bogus government programs or paying a fake fee for a trademark or patent. 

The bottom line is that small business owners and their employees should question anything that appears to be suspicious or out of the ordinary. The IRS does NOT phone companies about anything. Instead they mail an official notice. If you have any doubt, follow your gut feeling. 

Additional information on business and consumer scams is available from the FTC . Feel free to call any member of our team at 610-828-1900 if you suspect you are a scam victim. You can also contact either Don Kaiser, CPA, principal at 732-341-3893 ext. 15 or Donald.Kaiser@MCC-CPAs.com or myself Marty.McCarthy@MCC-CPAs.com . We are always happy to help.
Martin C. McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company, PC

Disclaimer This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).