Small business owners should constantly be alert for scams involving false billings. Small businesses are a particular soft target as scammers recognise they are busy and have fewer resources than larger businesses.
False billing scams include attempting to trick busy businesses into paying for unwanted or unauthorised listings or advertisements in magazines, journals or business directories. Common scam tactics are to send a business a subscription form disguised as an outstanding invoice to get the business to sign up for unwanted ongoing advertising services. Scammers also falsely claim that the directory or publication is well known or has a high readership.
Another common scam approach is sending invoices for the renewal of a business's current domain name registration – however the domain name will be slightly different, for example ".com" instead of ".com.au". Scammers will also do anything to get businesses to sign up to a scheme, including claiming a charitable connection. Scammers can also easily copy or modify letterheads, making them look real to create phoney websites.
Businesses should always be aware of such schemes. However, businesses should be more vigilant during the end of financial year. This being a prime time to settle accounts, businesses should to take a moment and check if the invoices are legitimate.
The Australian Competition and Consumer Commission (ACCC) is aware of the rise in billing scams. To help businesses avoid being a victim of scammers, the ACCC has provided the following tips for small businesses:
Make sure the business you are dealing with is the real deal – if you receive a form or tax invoice out of the blue, verify the source by contacting the company directly using contact details you sourced independently through a phone book or online search.
- Make your business "fraud-free" – effective management procedures can go a long way towards preventing scams. Have a clearly defined process for verifying and paying accounts and invoices. Try to avoid giving too many staff members the authorisation to make orders or pay invoices.
- Don't be intimidated – do not let anyone pressure you into making decisions involving payments or contracts. If you are unsure, always seek independent financial or legal advice.
- Update your IT security software regularly, and make sure you use and offer secure online payment methods.
While scammers are professionals at evading the law, the ACCC said it does take enforcement action where appropriate to deter and discourage scammers targeting Australians.
The ACCC has prepared an information sheet that sets out details of the most common scams targeting small businesses. The publication, What you need to know about: Small business scams, is available on the ACCC website at: http://www.accc.gov.au/publications/small-business-scams.