Identity Theft

Top Financial Scams Targeting Small Business Owners

Small and home-based business owners in desperate need of financing are increasingly being targeted by a flood of scam artists hoping to capitalize on wide spread confusion and economic hardship. The Better Business Bureau recently released its list of the top 10 scams and rip-offs for 2009. Here are a few examples from that list directed at small business owners:

Stimulus/Government Grant Scams – Even before President Obama announced the stimulus plan in February, scammers had already set up schemes for misleading consumers and small business owners into thinking they could get a piece of the pie. Offers for worthless assistance and advice on how to get government grants bombarded consumers online, over the phone and via mail and e-mail.

Google Work from Home Scam – Countless Web sites cropped up in 2009 that claimed you could learn how to make money from home using Google or Twitter and offered a free trial of learning materials. The Web sites often included the Google or Twitter moniker and logo. As a result, many people who complained to BBB thought they were getting a job with Google or Twitter when in, fact, they were being lured into another misleading free-trial offer and were billed every month for the materials and other mystery charges that added up to hundreds of dollars.

Over-Payment Scams – Over-payment scams typically target small business owners, landlords or individuals with rooms to rent and sellers on classifieds or sites like Craigslist. Typically the scammer pretends to be a customer, possible renter or interested buyer, respectively. The victim receives a check for more than the amount requested. The scammers then ask the victim to deposit the check and wire the extra amount elsewhere, such as to a shipping company. Ultimately though, the check is fake and the victim is really wiring money back to the scammers.

Other common fraudulent financial schemes include:

The Advance Payment/Fee Scam- A person claiming to be a loan broker asks for an upfront processing fee that can go as high as a few thousand dollars. Upon payment of the fee the “loan broker” disappears and the loan never materializes.

The Identity Thief- In this case sensitive information, not money, is the target. Fraudulent brokers lure unsuspecting business owners in to applying for a loan by either promising easy approval or low interest rates. After filling out the application, the broker absconds typically with the applicant’s social security number, bank account information, and even credit card numbers.

Fake Equipment Loans/Lease Programs- Business owners receive a letter or a phone call stating that they have been pre-approved for either an equipment loan or equipment lease. They are encouraged to send in their first payments, yet they never receive the equipment.

In an upcoming post, I’ll outline some tips on how to protect yourself and your business from these fraudulent financiers.

Source:

http://smallbusiness.dnb.com/business-finance/business-loans/3535-1.html

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