BBB: Three scams B.C.’s small business owners need to avoid

As we kick off Small Business Week, the Better Business Bureau (BBB) serving Mainland BC and Yukon recognizes the timely opportunity for business owners to expand their knowledge around how to avoid scammers.

B.C. is home to more than 510,000 small businesses and over five million people. That means approximately one out of every ten people in B.C. is either a small business owner or working on their own entrepreneurial dreams. These small businesses are the heart and soul of our communities. 

“Supporting BC’s small businesses is more than just buying local,” says BBB spokesperson Aaron Guillen.

“It’s making sure that these business owners have the resources they need to avoid falling for scams and sketchy marketplace interactions when they come face to face with them.”

Three scams to avoid

Business Email Compromise (BEC)

It is a form of fraud that attacks businesses of any size. Technically a form of spear phishing, BEC attacks companies by taking advantage of employees with access to sensitive company or customer data and those responsible for vendor management and payment processing activities. The scam plays out when a fake email or text message arrives from someone pretending to be the CEO, a senior manager, or a third-party vendor, requesting an immediate money transfer, a change of account number or invoice, or access to sensitive data. The message can be very convincing, as the scammer may use informal language and insert your name into conversation. At times, the email may have extra letters, numbers, or symbols in their address, making it difficult to decipher a fake from a real one.

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Local Example within BBB

Earlier in September, BBB experienced a similar form of spear phishing internally, when a scammer posed as Kip Morse, CEO of the International Association of Better Business Bureaus (IABBB). A text message was sent from the imposter to another member of the IABBB executive team, asking to ‘surprise staff with gift cards’ and to keep the conversation confidential to anyone else as ‘not to ruin the surprise’. No money was lost, as the staff member immediately spotted the scam.

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Directory Listing and Advertising Scams

Con artists try to fool small business owners into paying for nonexistent advertising or a listing in a nonexistent directory that specializes in your industry. 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 agreement. Later, you’ll get a bill, and the scammers may use details or even a recording of the earlier call to pressure you to pay.

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Local Example on Vancouver Island 

In April 2023, a Victoria woman, who runs her own skincare and beauty business, was contacted by a new Vancouver Island directory website, describing themselves as the hub for craft supplies and handmade and vintage products on Vancouver Island.

The directory contact convinced the woman to pay for a full year of premium advertising space upfront, as the site was set to launch in the coming months. Soon after, the directory contact disconnected their phone and didn’t respond to any email communication. The woman ended up losing $288 to this directory scam.

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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, such as 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.

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Local Example on Vancouver Island

In April 2023, a Victoria business woman received an invoice from a company claiming to provide safety-training video content, ranging from warehouse safety to handling hazardous substances in the workplace. 

The email claimed the woman had purchased a subscription to their video content and owed them $378. The company claimed that they had her bank account information and would charge her debit card within the following two days. They provided a toll free helpline in case she wanted to speak with a representative. 

Instead of calling them, she submitted the email interaction to BBB Scam Tracker and didn’t respond.

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Tips to avoid small business scams

Create a whitelist of trusted email addresses

• This ensures that emails from unknown addresses will be blocked or flagged. This minimizes the risk of phishing/spoofed emails getting through. In this same vein, never click on attachments or links from unknown email addresses as they may contain malware used to compromise accounts.

Add two-factor authentication to your company logins

• Ensure all software, including anti-virus software, is up to date on all computers, servers and mobile devices used by the business. Make sure all company staff change their passwords at least twice a year, especially when employees leave. A strong password has at least 12 to 14 characters, mixed with uppercase and lowercase letters, numbers and symbols

Research the company contacting you

• Is the business reputable? Are you able to find them online? Do they have a marketplace history? Do they have a physical location you can visit? Make sure you visit their business profile on BBB.org for their contact information, complaint history, and customer reviews.

Train employees to be critical thinkers

• Most business owners trust employees to handle telephone inquiries. Take the initiative to coach your staff, so they’re prepared to deal with suspicious callers. Always encourage your team to ask questions and keep personal information private until the legitimacy of a caller can be verified. Immediately end the call if any threats have been made.

Create a process for inspecting invoices

• Always check that goods or services were both ordered and delivered/completed before paying an invoice. Designate a small group of employees with authority to approve purchases and pay the bills.