Fraud perpetrators are always finding novel ways to steal from companies. To protect against losses from business fraud, owners and managers need to stay atop the latest types of frauds in business. This article discusses three recent business fraud schemes to watch out for: 1) social media influencer shakedowns, 2) corporate impersonation in phishing, and 3) business email compromise targeting remote workers.

Social Media Influencer Shakedowns

It’s common nowadays for so-called social media “influencers” to receive complimentary goods and services from businesses in exchange for free publicity on social media platforms. For example, a restaurant might offer free meals and drinks to an influencer in exchange for promoting the business on TikTok posts. However, some less ethical influencers may rack up big bills, not pay them and fail to post anything about the businesses. Others may accept money for “exposure packages” (to place a certain number of posts on various platforms) and then never deliver.

What should business owners do if influencers approach them for freebies? First, they should verify that the influencer has the number of followers claimed and that the person regularly publicizes local businesses on social media. In addition, business owners should consider using written agreements that specify what each party will provide, what’s promised in return, and a timeline. A company attorney can help draw up a basic influencer agreement to protect against fraudulent schemes.

Corporate Impersonation Fraud

Most business owners are familiar with the dangers of phishing schemes and have warned employees not to click links contained in suspicious emails. But savvy scammers have started using companies’ names, logos and other intellectual property, making phishing emails hard to identify. For instance, a perpetrator might set up a website that resembles the company’s site and use it to infect visitors with malware.

Countering corporate impersonation fraud can be challenging. If a business owner suspects that a con artist is impersonating the company, it should notify customers, vendors and other stakeholders immediately via email and social media channels. It’s important to warn of fake messages and remind them that the business doesn’t request sensitive information (such as credit card numbers) by email. An attorney can help draft these communications, so as not to alarm stakeholders, and help report the incident to the Internet Crime Complaint Center (ic3.gov).

Business Email Compromise (BEC) Scams

Fraudsters may also pose as supervisors or vendors in compromised business emails to gain unauthorized access to a company’s systems and data. This type of fraud in business has become more prevalent as remote work has expanded. In these business fraud schemes, perpetrators send emails asking recipients to initiate financial transactions, such as transferring money to an external account, often under the guise of urgency. Without in-person verification, employees sometimes unknowingly send money directly to the scammer.

To guard against business email compromise fraud, educate employees about business email compromise schemes and stress that financial requests should never be assumed legitimate without verbal confirmation. Employees should verify requests via a phone or video call initiated by them.

Business Fraud Threats Abound

Businesses are frequently at risk from fraud schemes, and new types of frauds in business can emerge unexpectedly. A forensic accountant can help employers identify vulnerabilities and establish policies and procedures that will help reduce business fraud risks. 

For more information on how to protect your business, contact us today.