Learning Center

Beware the Scammer: Knowledge is Your Best Defense

masked man holding up paper

It’s an unfortunate fact of life. There are people who will scam you and steal from you with no care for how much damage they cause. They’ll take your money, your reputation, your property, your ID and your business – anything they can get their hands on. The best way to guard against scammers is with knowledge and common sense.

Here are some common scams to watch for.

Invoice scam

Official looking invoices show up for supplies never received. Accounts payable assumes the purchasing department ordered them and pays the invoice. Or, unordered supplies show up but at significantly inflated prices. If accounts payable and purchasing are two separate areas, one assumes the other made the order and pays the bill.

Overpayment scam

A customer overpays for a purchase using a check and asks you to wire back the difference. The scam is that the initial check was no good. You’re not only out the product, you’re out funds.

Phishing scam

Phishing is a way scammers get financial information from your business. You may receive an official looking email from the FDIC, a bank or another financial institution asking to “verify” your business’ account information. (Some even ask your help in tracking online criminal activity.) Once your account information is entered, it only takes a few minutes for a thief to empty your business accounts.

TTY devices

TTY calls, a service through which people with hearing and speech limitations can communicate by phone, are being increasingly used by scammers. By law, the TTY operator is not allowed to disclose the origin of the call, so scammers can easily hide their location and identity. TTY makes the call untraceable and also plays on the sympathy of the victim, who believes he or she is helping someone with a hearing disability. Using a TTY service itself isn’t a scam, rather, it’s a technique used on many different scams.

What you can do to prevent scamming

The most important way to defeat a scammer is to institute strict accounting controls. Every purchase should be documented by issuing a purchase order to the supplier with an authorized signature and a unique number. Invoice handling should be centralized and authorization closely checked. Any suspicious invoice should be checked carefully before paying.

Never give out financial information to someone you haven’t done business with before. Scammers are very good at building rapport with an unsuspecting person to build trust and confidence. Don’t fall for it.

Whenever you send money to people you do not know personally or give personal or financial information to unknown callers, you increase your chances of becoming a victim of a scam. Your best defense? Don’t do it.

The bottom line: use common sense. If an invoice, email or request for information doesn’t look right or pass internal controls, or if it seems suspicious, investigate thoroughly.  

Additional information about scams and how they work is available from the FBI.

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