No one wants to be scammed. It costs money, and it can make you feel a little bit silly. Perhaps the worst thing is knowing that your money has gone to a scammer.

To help small businesses avoid scams, the Australian Consumer & Competitions Commission (ACCC) has recently published a guide aimed at reducing the increasing number of businesses falling foul of scams aimed at small businesses. The publication offers some important reminders for small business owners, particularly given the increase of non-face-to-face business operations.

The key message is that awareness is the best form of prevention. It also provides a useful catalogue of the more prevalent types of scams, which include:

  • Overpayment scams where an apparent overpayment is made for the supply of goods or services from the targeted business. Scammers hope for a refund of the overpaid amount before the target realises that a bounced cheque or phoney credit card has been used.
  • Trademark publication scams where the scammer will send the targeted business an invoice for the registration of a trade-mark with IP Australia. IP Australia's trademark register is free and these persons do not represent IP Australia.
  • Directory or advertising scams where a scammer sends a targeted business an unsolicited invoice from a directory or advertisement which they have no connection with or that does not exist.
  • Domain name scams where the targeted business is sent an unsolicited invoice for an internet domain similar to its own. The scammers try to trick the business into using their service or just take its money.
  • Fax back scams where the scammer sends the targeted business an unsolicited fax with a 'too good to be true' offer requiring a return fax. The target is charged for the reply fax at a premium rate netting the scammer a healthy profit.
  • Office supply scams where the targeted business is sent an invoice disguised as being from their 'usual supplier' but for goods or quantities that are not required.

To avoid being a victim, the ACCC recommends:

  • keeping filing systems well organised, aiding fraud detection;
  • paying attention to the identity of your usual suppliers;
  • not agreeing to offers by phone or right away - ask for written confirmation to keep a track of all dealings;
  • creating strict procedures for verifying, paying and managing accounts and invoices;
  • limiting the persons who are authorised to place orders and pay invoices;
  • asking for proof that you agreed to the supply of goods or services and checking that they have been received before paying;
  • never giving out or confirming business or personal information to people you do not know;
  • asking, when goods or services are apparently free, about all possible and ongoing obligations.

By being aware of the common tricks used by scammers you are already protecting yourself from them. If you are concerned, please contact Shaun Temby and Kim Lendich.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.