Mine Your Own Business

Small Business Scams

I think almost everyone reading this post has received an e-mail from Nigeria about a way to get fabulously wealthy, commonly called the Nigerian Scam. Well I did a little research and found out that this has existed in one form or another since the 1920s. Even more astounding is that it is still bilking people out of money, 100 million in 15 months according to a 1997 newspaper article. Click the link above to read all about it. What got me thinking about that particular scam is an article titled 7 Small Business Scam To Watch Out For and one of them was Phishing E-mails. Here's the complete list:

• Directory Scams
• Office Supply Scams
• Overpayment Scams
• Data Breach
• Vanity Awards
• Stolen Identity
• Phishing E-mails.

I had never even thought of a few that were mentioned in the article, so hopefully you'll find the list helpful. We've also done some posts in the past on some scams that you might be interested in Tis the Season and Another Scam Alert. Do you have any other scams that you've heard about or experienced first hand?

Beware of Grinches

Christmas has come and gone, but small business owners still need to watch out for Grinches. I'm not talking about the one in the classic animated feature based on the Dr. Suess book How the Grinch Stole Christmas! where the Grinch stole all the Who Christmas presents and even their decorations. I'm talking about all the nefarious people out there that focus on stealing your password and are intent on identity theft. A recent posting to Small Business Trends provides some excellent tips for protecting your passwords and identity online.

• Don't use the same password for everything.
• Use one password, customized for each site.
• Use a password manager.

The tips certainly get me questioning my own password policies, because I'm afraid I'm guilty of using a very limited list of passwords for most of the sites that require passwords (even though I really know I shouldn't). I'm going to make sure I look at all the different tips presented in the article to come up with a way to gradually change my bad habits. The posting also has a lot of great links to some of the various solutions presented. This is one thing that all small business owners should be concerned about, because there are a lot of Grinches out there intent on grabbing their passwords.

 

Another Scam Alert

Back on December 8th we did a posting titled Tis The Season on vacuum cleaner "salesmen" who were targeting elderly people in South St. Louis County by using a ploy similar to the old bait and switch. That scam was bad enough, but here's one from the AARP on a very clever and really scary scam. At first it didn't seem to be particularly relevant for small business owners until the article described that this particular scam was targeting small businesses.

Here's how the scam worked. The prospective victim would receive a telephone call from a telemarketer selling Internet services. Little did the victims know that their phone conversation was being recorded and the pitch was designed to get a "yes" response to a question. The telemarketer would then edit the recordings to make it seem that the person had agreed to sign up for their service. It gets better though, they would then mail "welcome packets" that were deliberately designed to look like junk mail so the packets would end up in the trashcan. Hidden in the fine print was the legally required disclosure of their "enrollment" and that they had 15 days to cancel to avoid monthly charges. The scam worked flawlessly on over 400,000 people to the tune of nearly $75 million until they were put of business by the feds.

The article concludes by giving some lessons to learn from this scheme and there are a few links to some other scams in the piece. Another interesting one is how crooks are installing card reading devices on gas pumps to steal debit card information. To quote a famous line from Hill Street Blues, "Let's be careful out there".

Tis The Season

The title of this post might lead to you think this was going to be a post on the holiday season, but instead this post is about something that is with us year round, unfortunately. There was an article in a local newspaper describing how it is the season of scams in St. Louis and one in particular that has really been prevalent is a scam targeting elderly St. Louis South County residents.

The article describes how a team of vacuum cleaner salesman posing as dealers for the Kirby company get seniors to buy junk vacuum cleaners by displaying and demoing a brand new high end Kirby. They then sell them a used, junk vacuum cleaner that has been placed in a brand new box. In one instance they even grabbed the victim's one year old vacuum while the other "salesman" kept the attention of the consumer.

The article provides a lot of other examples of some of the tricks they used and concludes with some tips consumers can use to try to protect themselves. Maybe one other thing any small business owner can do is make a copy of the article and place it in your store to warn your customers.

Scary Security Alert

We all know that the Internet can be a wonderful tool, but it can also be a real problem sometimes with spam e-mail, viruses, spy ware, etc. We recently came across a scary article that describes how NACHA - the Electronics Payments Association has warned members that cybercriminals are stepping up their attempts to steal online banking credentials, such as usernames and passwords from small businesses by using some new hacking tools. NACHA is not the only association to send out such an alert, a similar one was sent out to members of the Financial Services Information Sharing and Analysis Center.

The article then goes on to provide some of the details on how the cybercriminals are accessing usernames and passwords and thinks the reason they are targeting small businesses is their relative lack of certain security safeguards that a large corporation might employ. The really scary thing is that sometimes the comprised security is not immediately obvious so a complete takeover of a business account can take place. The stolen funds then are frequently sent overseas.

The final portion of the article describes some ways to reduce the risk of such and attack and makes some very important recommendations. The article is definitely worth reading and you can read the whole thing here. Just don't read it right before going to bed, it might give you nightmares.

Email from the IRS?

I received an email yesterday with the dreaded "Internal Revenue Service" in the "From" column.

 
 

Naturally, anything you get from the IRS is likely to cause a chill to run down your back.  Maybe your mouth gets a little dry and your hands start to shake a little.  But this message is potentially much more devastating than a real IRS message. 

Notice the subject, "please see the attachment".  I didn't open either attachment (There are two.) 

That was red flag number one.  Shouldn't the people who collect the money be able to count to two?  Shouldn't the subject be "please see the attachments"?  Maybe I'm being nit-picky but isn't the Internal Revenue Service the poster child for nit-pickyness?  I'm just saying.  [Note:  Nothing here should be construed as criticism of the faithful public servants who collect our taxes.  They're just doing their jobs.  Some of my best friends are retired IRS employees. I love the IRS.]

So, in the spirit of the season, I did some research hoping to save you, loyal readers, from any potential problems.  Here's what the IRS says on their web site: 

"The IRS does not initiate taxpayer communications through e-mail.

• The IRS does not request detailed personal information through e-mail.
• The IRS does not send e-mail requesting your PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts."

That's pretty clear.  If you receive anything like this, the IRS wants to know about it.  It's called phishing.  You can forward the email to them following the instructions on their site.

But most important, the last thing you want to do is turn any personal information over to crooks, even if they're posing as the IRS. 

F-R-E-E Doesn't Always Spell Free

Surely you've seen him on television, dressed in his pirate costume, or driving his junker compact car.  No doubt you've heard him constantly on the radio sadly singing about how he should have gone to freecreditreport.com, but he was too "lay-zee."  According to a story at the New York Times.com, you should have heard and seen the commercials many times.  Experian, the parent of freecreditreports spent $70.7 million dollars on national advertising last year.

That's a lot of money to spend promoting something that's "free".  But as the Times story points out, freecreditreports is anything but.  "Consumer groups have long objected to sites like FreeCreditReport.com. Consumers may obtain a free credit report each year from the three major agencies, as mandated by an act that Congress passed in 2003. The only authorized site for that is AnnualCreditReport.com. "

So don't be fooled by the cute little guy in the pirate suit.  He's just an actor.  It's the people he works for that are the pirates.

More on Event Marketing

Last week we posted on a session we attended on the topic of show and event marketing.  The first half of the presentation was given by Sally Cheney of Sally Cheney's Superstore in Tennessee.  The second half presenter was Mike Piper of Best Sewing in Seattle.  Today we look at Mike's take on the subject.

Mike began by saying that as advertising becomes less effective shows and events become more important. Continuous activity will lead to continuous sales.  He likes to do a variety of events, both in-store and out.  He feels that post cards are the best way to promote his events.  "You have to do something every month."

Mike's a believer in having lots of activity going on at a home show or other off-site event.  Have lots of working samples.  If one is good, five is five times as good.  He also sells his demo models during the event.  He gets the money up front and delivers the demo when the event is over. 

Probably the key to Mike's event success is his attitude.  "We sell things!" he says.  He's not spending the money to do a show just to visit with people.  If you come into his booth (and he will come into the aisle to get you) someone's going to ask you to buy something. (See our earlier post  There's Nothing Wrong with Making a Sale.)

One thing that is often overlooked is residual business.  If you put on a good event, you'll have customers coming into your store for months because of it.  Events and shows don't just lead to immediate sales, but also to on-going sales all year long.

IRS Scam Warning

Your friends at the Internal Revenue Service have issued an alert to taxpayers on the latest version of an email scam.  The email, claiming to be from the IRS, says the recipient is under a criminal probe for submitting a false tax return.  You're asked to click on a link that contains more information.  In fact the link is a Trojan Horse, a piece of software that can take over your hard drive and allow someone remote access to your computer.

According to the IRS, they never send unsolicited emails or ask for detailed personal or financial information, including PIN numbers, passwords, or similar secret codes for credit cards, banks, or other financial accounts.

If you receive a questionable email that appears to be from the IRS, do not open any attachments or click on any links.  Instead, forward the email to [email protected].  (Follow the instructions.)

Other scams involving the IRS include emails with links to a fake IRS web site which asks for bank account numbers, emails claiming that the recipient has a refund coming and asking for bank account information, and one stating that the IRS' "anti-fraud commission" is investigating the recipient's tax returns.

Bottom line, no reputable organization ever asks for confidential information over the internet.