SCAMS AND YOUR 

SMALL BUSINESS

Federal Trade Commission | business.ftc.gov

A Guide for Business
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Scams and Your Small Business

If you own a small business or are part of a non-profit 

organization, you spend a lot of time and effort making 

sure the organization works well. But when scammers go 

after your organization, it can hurt your reputation and your 

bottom line. Your best protection? Learn the signs of scams 

that target businesses. Then tell your employees and 

colleagues what to look for so they can avoid scams. 

Scammers’ Tactics

● Scammers pretend to be someone you trust. 

They make themselves seem believable by 

pretending to be connected with a company you 

know or a government agency. 

● Scammers create a sense of urgency. 

They rush you into making a quick decision before 

you look into it.

● Scammers use intimidation and fear. 

They tell you that something terrible is about to 

happen to get you to send a payment before you 

have a chance to check out their claims.

● Scammers use untraceable payment methods. 

They often want payment through wire transfers, 

reloadable cards, or gift cards that are nearly 

impossible to reverse or track.
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Be Tech-Savvy

● Don’t believe your caller ID. Imposters often fake 

caller ID information so you’ll be more likely to 

believe them when they claim to be a government 

agency or a vendor you trust.

● Remember that email addresses and websites that 

look legitimate are easy for scammers to fake. Stop 

and think about whether it could be a scam before 

you click. Scammers even can hack into the social 

media accounts of people you trust and send you 

messages that appear to be from them. Don’t open 

attachments or download files from unexpected 

emails; they may have viruses that can harm your 

computer. 

● Secure your organization’s files, passwords, and 

financial information. For more information about 

protecting your small business or non-profit 

organization’s computer system, check out the 

FTC’s Small Business Computer Security Basics at

FTC.gov/SmallBusiness.

Know Who You’re Dealing With

● Before doing business with a new company, search 

the company’s name online with the term “scam” or 

“complaint.” Read what others are saying about that 

company.

● When it comes to products and services for your 

business, ask for recommendations from other 

business owners in your community. Positive wordof-mouth from trustworthy people is more reliable 

than any sales pitch.

● Don’t pay for “free” information. You may be able 

to get truly free business development advice and 

counseling through programs like SCORE.org. 

How Can I Protect My Business?

Train Your Employees

● Your best defense is an informed workforce. Explain 

to your staff how scams happen and share this 

brochure with them. Order free copies at 

FTC.gov/Bulkorder.

● Encourage people to talk with their coworkers if 

they spot a scam. Scammers often target multiple 

people in an organization, so an alert from one 

employee about a scam can help prevent others 

from being deceived. 

● Train employees not to send passwords or 

sensitive information by email, even if the email 

seems to come from a manager. Then stick with the 

program — don’t ever ask for sensitive data from 

employees by email.

Verify Invoices and Payments

● Check all invoices closely. Never pay unless you 

know the bill is for items that were actually ordered 

and delivered. Tell your staff to do the same.

● Make sure procedures are clear for approving 

invoices or expenditures. To reduce the risk of a 

costly mistake, limit the number of people who are 

authorized to place orders and pay invoices. 

Review your procedures to make sure major 

spending can’t be triggered by an unexpected call, 

email, or invoice.

● Pay attention to how someone asks you to pay. Tell 

your staff to do the same. If you are asked to pay 

with a wire transfer, reloadable card, or gift card, you 

can bet it’s a scam. 
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Common Scams that 

Target Small Business

Fake Invoices 

Scammers create phony invoices that look like they’re 

for products or services your business uses — maybe 

office or cleaning supplies or domain name registrations. 

Scammers hope the person who pays your bills will assume 

the invoices are for things the company actually ordered. 

Scammers know that when the invoice is for something 

critical, like keeping your website up and running, you may 

pay first and ask questions later. Except it’s all fake, and if 

you pay, your money may be gone.

Unordered Office Supplies and 

Other Products

Someone calls to confirm an existing order of office 

supplies or other merchandise, verify an address, or offer 

a free catalog or sample. If you say yes, then comes the 

surprise — unordered merchandise arrives at your doorstep, 

followed by high-pressure demands to pay for it. If you don’t 

pay, the scammer may even play back a tape of the earlier 

call as “proof” that the order was placed. Keep in mind that 

if you receive merchandise you didn’t order, you have a 

legal right to keep it for free.

Directory Listing and Advertising Scams

Con artists try to fool you into paying for nonexistent 

advertising or a listing in a nonexistent directory. They often 

pretend to be from the Yellow Pages. They may ask you to 

provide contact information for a “free” listing or say the call 

is simply to confirm your information for an existing order. 

Later, you’ll get a big bill, and the scammers may use details 

or even a recording of the earlier call to pressure you to pay. 

Utility Company Imposter Scams

Scammers pretend to call from a gas, electric, or water 

company saying your service is about to be interrupted. 

They want to scare you into believing a late bill must be 

paid immediately, often with a wire transfer or a reloadable 

card or gift card. Their timing is often carefully planned to 

create the greatest urgency — like just before the dinner 

rush in a restaurant.

Government Agency Imposter Scams

Scammers impersonate government agents, threatening to 

suspend business licenses, impose fines, or even take legal 

action if you don’t pay taxes, renew government licenses 

or registrations, or other fees. Some businesses have been 

scared into buying workplace compliance posters that are 

available for free from the U.S. Department of Labor. Others 

have been tricked into paying to receive nonexistent 

business grants from fake government programs. 

Businesses have received letters, often claiming to be from 

the U.S. Patent and Trademark Office, warning that they’ll 

lose their trademarks if they don’t pay a fee immediately, 

or saying that they owe money for additional registration 

services. 

Tech Support Scams

Tech support scams start with a call or an alarming pop-up 

message pretending to be from a well-known company, 

telling you there is a problem with your computer security. 

Their goal is to get your money, access to your computer, 

or both. They may ask you to pay them to fix a problem you 

don’t really have, or enroll your business in a nonexistent 

or useless computer maintenance program. They may even 

access sensitive data like passwords, customer records, or 

credit card information. 
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Social Engineering, Phishing, and 

Ransomware

Cyber scammers can trick employees into giving up 

confidential or sensitive information, such as passwords or 

bank information. It often starts with a phishing email, social 

media contact, or a call that seems to come from a trusted 

source, such as a supervisor or other senior employee, but 

creates urgency or fear. Scammers tell employees to wire 

money or provide access to sensitive company information. 

Other emails may look like routine password update 

requests or other automated messages but are actually 

attempts to steal your information. Scammers also can 

use malware to lock organizations’ files and hold them for 

ransom. 

Business Promotion and Coaching Scams

Some scammers sell bogus business coaching and 

internet promotion services. Using fake testimonials, 

videos, seminar presentations, and telemarketing calls, the 

scammers falsely promise amazing results and exclusive 

market research for people who pay their fees. They 

also may lure you in with low initial costs, only to ask for 

thousands of dollars later. In reality, the scammers leave 

budding entrepreneurs without the help they sought and 

with thousands of dollars of debt.

Changing Online Reviews

Some scammers claim they can replace negative reviews of 

your product or service, or boost your scores on ratings sites. 

However, posting fake reviews is illegal. FTC guidelines say 

endorsements — including reviews — must reflect the honest 

opinions and experiences of the endorser.

Credit Card Processing and 

Equipment Leasing Scams

Scammers know that small businesses are looking for ways 

to reduce costs. Some deceptively promise lower rates 

for processing credit card transactions, or better deals on 

equipment leasing. These scammers resort to fine print, 

half-truths, and flat-out lies to get a business owner’s 

signature on a contract. Some unscrupulous sales agents 

ask business owners to sign documents that still have key 

terms left blank. Don’t do it. Others have been known to 

change terms after the fact. If a sales person refuses to 

give you copies of all documents right then and there — or 

tries to put you off with a promise to send them later — that 

could be a sign that you’re dealing with a scammer. 

Fake Check Scams

Fake check scams happen when a scammer overpays with 

a check and asks you to wire the extra money to a third 

party. Scammers always have a good story to explain the 

overpayment — they’re stuck out of the country, they need 

you to cover taxes or fees, you’ll need to buy supplies, or 

something else. By the time the bank discovers you’ve 

deposited a bad check, the scammer already has the 

money you sent them, and you’re stuck repaying the bank. 

This can happen even after the funds are made available 

in your account and the bank has told you the check has 

“cleared.”
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Learn

● For more tips on protecting your organization from 

scams, visit FTC.gov/SmallBusiness.

● Stay connected with the FTC by subscribing to 

the FTC’s Business Blog at FTC.gov/Subscribe or 

signing up for scam alerts at FTC.gov/Scams.

● Order free copies of this brochure in English at

FTC.gov/Bulkorder and in Spanish at 

FTC.gov/Ordenar.

Report

● If you spot a scam, report it to FTC.gov/Complaint. 

Your report can help stop the scam. 

● Alert your state Attorney General. You can find 

contact information at NAAG.org.

Engage

● Remember: Your best defense is an informed 

workforce. 

● Talk to your staff about how scams happen. 

● Share this brochure.
About the FTC

The FTC works to help small business owners avoid scams, 

protect their computers and networks, and keep their 

customers’ data safe. To find information for small business, 

go to FTC.gov/SmallBusiness. There you’ll find information 

about scams targeting small business and how to avoid 

them, and information on cybersecurity for small business to 

help owners keep their networks safe. 

To get the latest information for small business, subscribe to 

the FTC’s Business Blog at FTC.gov/Subscribe.

Federal Trade Commission

business.ftc.gov

May 2018