Scam artists know how anxious business owners are during the current coronavirus (COVID-19) crisis. They know that as you struggle to meet customer demands, pay employees and stay solvent, you’re more likely to drop your guard and fall for a fraud scheme. The last thing your business needs right now is to suffer additional financial losses. So keep an eye out for the following scams:
Fake suppliers. Whether you’re a manufacturer seeking raw materials or a grocer desperate to keep shelves stocked, you may have trouble getting your usual supplies. If a regular supplier is temporarily — or permanently — shut down, be careful about doing business with unknown vendors. Many authentic-looking websites are, in fact, fronts for criminal operations, and if you place an order with them, you may never receive the goods. Also be wary of cold callers promising to source hard-to-get items. If it sounds too good to be true, it probably is.
Defective goods. Even if you do receive your supply order, there’s a chance its contents will be defective. In early March, an international team of law-enforcement agents arrested 121 criminals around the world who were selling counterfeit surgical masks, hand sanitizer and other in-demand products. Depending on your business, buying defective goods could be an expensive mistake — or a public health emergency.
Payment fraud. Online payment fraud was already growing aggressively. But COVID-19 is expected to throw fuel on the fire as more people turn to home services apps, such as those for food delivery and online learning. Consumers usually don’t pay when their stolen credit cards are used to make purchases. But businesses generally do. You’re likely to be held responsible for fraudulent transactions, as well as possible chargeback fees. So be vigilant about maintaining IT security. Retailers might consider adding an Address Verification Service, which confirms a cardholder’s billing address with the card company.
Google scam. Fake robocalls claiming to come from Google have circulated for several years. Now there’s a COVID-19 twist. The recorded message tells businesses “affected by the coronavirus” that they need to ensure their Google listing is correct so that customers can locate them during the pandemic. If you speak to someone, he or she may ask for payment to list your business or try to gain confidential information. Know that Google never makes unsolicited sales calls. If someone tries to convince you otherwise, hang up.
Unfortunately, these schemes represent only the tip of the iceberg. For the latest on COVID-19-related fraud, visit the Federal Trade Commission’s “Business Center” at ftc.gov/tips-advice/business-center.
We highly recommend you confer with your Miller Kaplan advisor to understand your specific situation and how this may impact you.