Scammers often target small businesses to unethically charge money with no real ROI. Once compromised, a company can suffer from disastrous effects, from loss of money to reputation damage. You can avoid these scams by staying up-to-date about their tactics and looking out for warning signs.
In 2018, the Better Business Bureau (BBB) surveyed 1,200 small businesses about online scams. Awareness of various scams ranged from 2% to 79%.
Based on their detailed findings, the BBB estimates that 6% of small businesses lose money to scams yearly, totaling about $7 billion per year. This is not including more intangible costs such as lost time, damage to reputation, and lost consumer trust.
Small businesses are often targeted with marketing scams where they needlessly spend their hard-earned cash with little to no ROI at best, and actual damage to their business or reputation at worst.
Unethical companies typically choose small businesses because:
- The average small business owner may be unfamiliar with how marketing services work or generally have a gap in knowledge that can be exploited.
- They know small business owners are typically busy and do not have a long chain of command to get to a decision-maker.
- They take full advantage of fear, tricking owners to believe that their business might already be damaged or will be if they do not hire them to fix it.
Awareness and education are critical to fighting against these sorts of scams. In this article, I’ll identify seven of the top scams I’ve seen targeting small businesses.
6 Marketing Scams Businesses Should Avoid
- Google Business listing telemarketing calls and robocalls
- Promises to rank No. 1 on Google
- Domain name payment requests
- Fake telephone directory listing payment requests
- Requests to pay via credit card
- Vanity awards
1. Google Business Listing Telephone Calls
One of the top scams I have observed targeting small businesses comes in the form of robocalls. These recordings will typically state one of two things:
- There is a problem with your Google business listing or it’s not “verified.”
- You must “take action” or your Google business listing will be removed
I have also had some clients who received calls of this nature from live telemarketers. So, there appears to be a second version that eliminates the robocall step but is otherwise almost identical.
How to Tell It’s a Scam
The important take-away is that Google does not call businesses in this manner. They state on their support website that:
“Google does not make unsolicited sales calls from an automated system. However, we may place automated phone calls to your business, as a service to Google users, for non-sales tasks like making reservations or confirming your business hours.”
For example, if you choose phone verification when you set up your Google business listing, you will receive an automated call from Google. Additionally, there is no charge to set up a Google My Business™ listing.
It’s also worthy to note that similar scams now exist. I recently received a robocall stating, “Your company is not registered with Amazon Alexa Voice Services.”
This is very similar to the Google listing scam in that the message attempts to create fear. They want you to doubt that your business is “missing out” and could be gaining new customers. You are then prompted to speak with a representative.
The Federal Trade Commission is active in the fight against illegal and scam robocalls, so it is important to report new ones.
2. Promises to Rank No. 1 On Google and Other SEO Scams
Search engine optimization, when done properly and ethically, can help your business website be seen by your target audience. Like most marketing activities, it is very hard to guarantee certain results.
When a company promises gratuitous results, such as making your website #1 on Google, it’s likely a scam.
Other SEO-related scams can include:
- Guaranteed traffic (which is typically fake, a bot, or not targeted).
- The use of “proprietary” technology that will get you better search engine rankings over the competition.
- A claim to “know someone” or have a “connection” with Google.
These companies can be very convincing with “evidence” such as screenshots of No. 1 rankings, “testimonials” from past clients, and lofty guarantees – all of which are very easy to fake.
Take a look at this fake email below, which claims that a company can get you to the No. 1 spot on Google.
The sender promises grand results and prompts you to reply, which likely indicates that it’s a scam.
How to Tell It’s a Scam
This may be the easiest one to spot on the list but also one that small businesses continually fall victim to. Scammers can be very convincing, and small business owners might lack knowledge of how legitimate SEO works.
The biggest tip-off is that these are always cold solicitations, typically through email. They often contain no personalization or inaccurate information about your business as well as spelling or grammar errors. Usually, they do not disclose their company information or only use a Gmail address.
Even if a solicitation passes those red flags, guaranteed placement or traffic, “proprietary” technology, or claims to have “insider information” from Google should immediately signal that it is a scam.
3. Domain Name Payment Requests
Domain name scams are one of the oldest tricks on this list. I remember receiving snail mail letters like the one below as far back as 10 years ago.
Unscrupulous domain companies will typically target small business owners with a snail mail solicitations like the one below. In this letter, the scammer makes it appear that your domain name is expiring so that they can solicit payments.
While the letter might look official, it’s really a scam.
The solicitation is almost always laid out like an invoice. The reason it has perpetuated for so many years is that busy small business owners are tricked into thinking it’s a legitimate bill and simply pay it.
I have had actual clients of mine fall for this when the scam first came about. The result was not only a fee that was many times the rate of a regular domain registration, but also an authorization to transfer their domain to this other company and away from their original registrar.
Once transferred, their website would also go down, and it was a difficult process to re-transfer the domain.
How to Tell It’s a Scam
First, if it comes from Domain Registry of America, that is your number one tip-off. This company has been unethically tricking customers into payment and transfer of domains for years. Sadly, it is not the only one.
Here are other ways to spot this type of scam:
- Know who your domain registrar actually is—if the solicitation isn’t from that company, it’s a scam.
- Know when your domain actually expires/renews again—often these types of scams have false information about when your domain is expiring.
- The notice looks like an invoice, but somewhere on it, the text says that it is not actually a bill.
- The notice claims another company is trying to “use” your name and suggests purchasing multiple other (often foreign) domains.
By looking for these red flags, you can avoid accidentally switching over your domain and losing out on money.
4. Fake Telephone Directory Listing Payment Requests
The telephone directory scams will typically contact small businesses by phone or snail mail. The companies perpetrating these scams will often use names that are very similar to actual directories (e.g., Yellow Pages United).
Much like the domain registration scams, they typically look like an invoice. The twist is that they are prompting you to “review your ad” or “confirm your listing.”
Here is an image sample of an official-looking directory order form.
Like the domain scam, this letter prompts you to confirm your business details while also asking for financial information.
How to Tell It’s a Scam
You can avoid this trap by looking for these tip-offs.
- A caller wants to “verify” your phone book or Yellow Pages information (do not respond and hang up).
- In the case of snail mail, somewhere on the “invoice” is usually printed, “this is not a bill” and there is often a disclaimer at the bottom.
- Check the name on the invoice closely—if it’s not a company you currently do business with, it’s likely a scam.
Remember, even if it looks official, it doesn’t mean that it is. Be diligent in spotting those signs to avoid getting scammed.
5. “Do You Accept Credit Cards?”
One illegal scam that primarily targets service-based businesses involves asking for credit card details. You will receive a quote request by email or text with enough information to potentially be legitimate, but the requester always asks if you accept credit cards.
This is a screenshot of a phishing email that’s asking for my credit card information.
The email opens asking for a quote but suspiciously asks if I accept credit cards.
How to Tell It’s a Scam
The very first time I got one of these myself, I had a sneaking suspicion that it was not legitimate. I went to Google and searched, “do you take credit cards scam,” and got pages of results.
Here are top tip-offs to detect this scam before responding to it:
- The email or text is often awkwardly worded with atypical grammar.
- They state that they need whatever your service is (e.g., an e-commerce website).
- They ask if you accept credit cards.
If you have responded, here are additional tips to identify this scam:
- They are fine with any price you tell them.
- They ask you what credit card merchant you use.
- They give false information such as names, business names, and addresses.
- They ask for a “favor,” which includes they pay more than what you are asking, and you are to send part of the funds to someone else.
The scammers use stolen credit card information and request that you overcharge the card and send a check to a specific address. Clearly not legitimate. It’s best to not respond to or engage these types of scammers.
6. Vanity Award Scams
There is no question that small business owners are often very proud of their businesses.
Vanity award scams take full advantage of this. The scams typically target small businesses through an email solicitation that their business is the recipient of an award.
Often, the name of the award includes “best of” and the area the business is located in. However, there are a number of variations to this, including being added to an “exclusive” directory rather than receiving an award.
In order to claim this award, a business owner must pay for it. In addition, there is usually a mention of receiving a plaque or trophy as well.
How to Tell It’s a Scam
If the solicitation you receive matches the description above, it’s a scam. Also, any award that you are asked to pay for should be a big red flag. Those are typically not legitimate awards.
Small Businesses Can Avoid Scams by Staying Informed
Scammers are masters of illusion. They often do everything they can to pretend to be from or associated with a company you already know, such as Google or the Yellow Pages.
They can spoof phone numbers and also generate websites, documents, and emails. Even text messages can seem very official unless scrutinized carefully.
Before doing business with any company or individual, research them. If you can’t easily verify a company or individual who has contacted you, then there is high potential it might be a scam.
Make sure all of your employees are also trained to spot scams.
Finally, trust your gut instincts. If something doesn’t feel right about it, or if the details just don’t seem to add up, it might be a scam. It’s usually better to err on the side of caution and not respond.
If your business is targeted, remember the tips covered here on how to spot scams. Then consider fighting back and report the scam.
Awareness is your number one defense against these and other types of scams. Educating yourself and any of your employees on how to spot them can ensure that even if you are targeted, your business does not become a victim.