Falling victim to a scam can be devastating – both personally and financially – and fraudsters are coming up with ever more sophisticated ways to get their hands on your money.
More than £1.2bn was stolen through fraud in 2022, according to the latest data from industry body UK Finance. Although this was less than in 2021, it’s still a staggering amount – the equivalent of over £2,300 a minute.
But if you know what to look for, there are steps you can take to protect yourself and your customers, and stop hard-earned cash being stolen.
Here are four types of scams you might come across as a small business owner. We also explain what you can do to avoid them.
Over £485m was lost through authorised push payment (APP) – or bank transfer – scams in 2022. These are where you are duped into transferring money to a scammer pretending to be someone else, such as a trusted organisation like your bank or HMRC.
Your customers could even be targeted by someone impersonating you, a scammer convincing them to transfer money to their bank account instead of yours.
You can help to protect you and your customers by taking these steps:
Invoice fraud involves a criminal pretending to be from one of your suppliers. The scammer will ask you to change the bank details you usually use to pay the supplier so they get the money instead.
These scams can be very sophisticated, and the criminals can find out real invoice and payment details to make their request look genuine. They can intercept emails, spoof emails from the supplier or even hack into its email system.
To avoid invoice fraud, follow this advice from the government-backed Take Five campaign:
This is when a scammer sends an email posing as someone’s boss or another senior manager, asking them to make an urgent payment or change the bank details they use to pay a supplier.
The criminals might create a spoof email that looks like the real deal, or even hack the boss’s real email account to send the request.
If the member of staff transfers the money, they’ll be sending it straight to an account controlled by the criminals.
To avoid this scam, make sure all your staff know about CEO scams and to do the following:
A scammer contacts you via a telephone call, email or letter pretending to be from Companies House asking you to make a payment or provide personal details.
In a scam telephone call you may be told you need to pay a late filing penalty, or asked for your authentication code or directors’ details, such as their dates of birth.
Scam emails may have documents attached or ask you to enter your authentication code, or you may be sent a fake complaint about your business or request to correct information. Some also ask you to click on a link to download a document or verify your identity.
Fake letters include ones asking for payment for company registration or from prosecuting solicitors asking for payment to clear an unpaid invoice.
To avoid Companies House scams, follow our advice:
Email scams, also known as phishing scams, are where fraudsters try to trick you into providing information or downloading malicious software. For advice on how to avoid them, visit 10 steps to spot an email scam.
You can also read our guides to different types of scams to find out more.