By now you’ve probably heard it all. The $10,653,876 you won in a lottery you didn’t enter; the unclaimed jewels in a safe-deposit box just waiting for you to take ownership; the lonely widow looking for someone nice to bequest her millions to; the critically ill child whose very survival depends on your generosity; the Microsoft / Google / Apple / Coca-cola competition that you’ve won; the substantial inheritance left to you by someone bearing your surname. A cursory glance at your deleted items and junk folder will probably unearth a few more whoppers. There’s also many a joker who has taken delight in turning the tables and leading the would-be fraudster down a few garden paths. But scamming is no laughing matter. Staying ahead of the professional scammer in today’s world is a high-stakes game of cat-and-mouse. The aim of the game is to avoid getting caught.
Conducting a business increases your susceptibility to scams. There are several steps that business owners can take to avoid being caught in a scam. Here are a few suggestions:
- Know your business. Keep your finger on the pulse. Know your customers and what money is expected in. Know your suppliers and what money is expected to be paid out. If you employ an accountant, bookkeeper or collections clerk then make sure that stringent procedures are in place, incorporating checks and balances, to ensure that the correct amounts are received from and paid to the correct people.
- Ask your customers to phone and verify any change of bank details notices that they may receive purporting to come from your company. You may also want to include a standard clause in your legal contracts and terms & conditions that obligates your clients to verify any change of bank account notification that they may receive.
- When you receive a notice advising you that a supplier’s bank details have changed then phone the supplier to confirm the legitimacy of the notice. Use the phone number that you have on record, and not the phone number provided on the notice.
- Another popular scheme is for the fraudster to pose as a customer and claim an overpayment into your account. Ask for the alleged claim to be submitted in writing then check all the details – email address, registration number, telephone number and the like – against the customer information that you have on record. You should have all this information in your customer file, such as the credit application form / terms and conditions / other written agreement originally signed by your customer.
- Before you refund any alleged overpayment, make sure that the amount is fully cleared by your bank. Check how the overpayment was made: cash deposit, EFT or cheque? The alleged cheque payment is particularly risky, but even cash deposit receipts and proof of EFT payments have been known to be forged. Resist any pressure to refund the money until you have the all-clear from your bank.
- Before making payments make sure that you have the correct account details. Preferably given to you in writing by the intended recipient. And even better, you can ask for proof of the bank details such as a cancelled cheque or copy of their bank statement (clearly showing the name and account details even if the transaction details are blacked out). Avoid accepting banking details telephonically.
Scammers are constantly evolving and adapting their methods. It’s not always that easy to spot a potential scam, and even cautious businessmen and women are increasingly being trapped by the level of professionalism and sophistication used by the more successful fraudsters. It is therefore crucial for business owners to implement stringent security measures and take precautions to avoid failing into a scammer’s snare, including having proper procedures and written terms and conditions in place.
Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.