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Scams Are Targeting Your Small Business. Know How To Avoid Scammers!

While most of your clients and customers are genuine, there are a few who will try to scam you. 

One of the prime targets for scammers is small businesses and freelancers just starting. 

You need to know what to look for and what security steps to take to avoid scammers. Here are a few things you can do to avoid being scammed by fake clients and save your money.

What Is A Scam?

A scam is a scheme to deceive an entity, usually a person or business, to get something valuable from them, especially money.

Unfortunately, we live in times where scammers are rife in every aspect of our lives.

It’s easy to say to yourself that a scammer will never con you, that you’re too tech savvy to have the wool pulled over your eyes, but it can happen to anyone in an instant when your guard is down.

My Own Scam Story

Last year I fell victim to a SIM and card theft scam.

Through my fault, I failed to register the change of my new home address with my business bank.  

The bank sent a replacement card to my old address.

That must have been too tempting for whoever intercepted it in the mailbox.

The scammers managed to register an eSIM on my phone account and used the registered number to activate the bank card.

They syphoned over $25,000 from the account in only a few hours before the bank stopped the newly activated card.

The only clue I had was my phone suddenly had only emergency service.

I eventually got my phone account and my money back, but it was a long and stressful process.

When Do Scammers Strike?

Scammers will strike at any time, but especially when you are most distracted or super busy – that’s when you’re guard is likely to be at its lowest.

The SIM Theft Scam

SIM cards

In my case, the scammers used my bank card and several calls to the bank to get enough data to apply for an eSIM card on my account.

Unfortunately, the ACCC has decided not to apply strict regulation on the purchase of eSIMs ref: https://www.accc.gov.au/regulated-infrastructure/communications/mobile-services/e-sims-in-australia

However, scammers can try to activate a SIM transfer on your registered phone number.

Usually, when you swap SIM providers, a text message is sent out to your current phone number with a One Time Pin (OTP) authorisation code.

The wording of the text message is up to the service provider, and sometimes there is no context, and it could simply read as a six or eight digit number.

The scammers will call you and try to get you to read out the number so they can complete the SIM swap.

Some excuses they use could be a returns number or a pending delivery sent to your address by mistake, or a carrier service outage number. 

The scammers are very resourceful, always pleasant on the phone, and they have their story dialled in to make it as authentic and believable as possible.

If anyone calls you and asks you to read out a code, hang up immediately and contact your phone carrier to check your account details and ask if there have been any attempts to port your number or SIM card.

The Freelancer / Small Business Website Scam

Freelancers and small businesses often fall for these two website scams.

The Credit Card Scam

credit card scam

The new client has approached you over email and sent you a project brief.

You’ve costed it up and presented your proposal and your usual terms and conditions and payment options, usually PayPal, Stripe or direct bank transfer, by email reply.

At this point, the client emails you a story of losing hundreds of dollars on their last Stripe transaction or that the last time they used PayPal, they were charged double.

Essentially they will make any excuse not to pay you using your preferred method and will likely ask you if you will accept a credit card.

Any excuse not to use your preferred payment terms is a big red flag 🚩

The scammer is likely charging costs to a credit card to get benefits or points that they can exchange as cash.  

The credit card costs are disputed as chargebacks, or the supplier blocks the credit card.  

During this time, you are building a website that is never needed.

You’ve wasted time and effort, and you don’t get paid.

The Work Upfront Scam

working without a deposit or signed contract

You receive a cold email with a website project outline.

After a bit of back and forth, you agree on a proposal and a cost, all conducted over email.

You decide or agree to start working on the project without a deposit or a signed formal agreement.

Working for free with no signed agreement happens a lot in the freelancer world!

Many new freelancers or new starts to the web development industry are so eager and so focused on getting their first clients that they overlook contracts and due diligence.

You know how this story is going to end. 😟

The project is completed and delivered, and you send the client a final invoice for the work.

The client goes radio silent, and your emails get no response.

You have no other means of communication, and contractually you have nothing to make any legal appeals.

You’ve wasted time and effort, and you don’t get paid.

The Domain Name Expiry Scam

This scam is technically borderline, but it annoys me so much that I’m classifying it as a scam.

The plot goes like this.

Some of your domain names are expiring soon, and you receive a paper “invoice” in the post to renew your domains.

Domain renewal may not initially raise any red flags, and you may already be aware that you’ll have to renew your domain soon.

However, in 99% of cases, your domain registrar is legally obligated to send the domain administrator an email when a domain renewal is due (not a postal invoice letter).

In most cases, domains automatically renew with your stored billing details.

Upon closer inspection of the paper invoice, you’ll find that it’s from a company you have never heard of, and it’s likely they are charging double or more for domain renewal.

The paper invoice is a trick to transfer your domain name over to their company so they can charge you more.

Transferring your domain name to another company is not illegal, but the way these companies obfuscate what is happening is undoubtedly morally questionable.

Always be aware of which registrar you have your domain names with and check your renewal notices, especially if they are paper invoices.

How Do You Protect Yourself From Getting Scammed?

Try to be as vigilant as possible and be aware that scammers are out there.

1. Pay Attention To The Email Domain

Scammers prefer to communicate using email only and generally use free email services that require little authentication.

While this is not always the case, I am generally wary of responding to potential client lead emails from the following domains.

  • gmail.com
  • hotmail.com
  • outlook.com
  • yahoo.com
  • aol.com
  • yandex.com
  • protonmail.com
  • zoho.com
  • icloud.com

2. Ask For A Zoom Chat

I never take on any clients without either meeting them in person or chatting to them over video.

Scammers hate getting on camera.

If a potential client refuses to go on a video chat with you, your guard should be straight up.

3. Get Your Contract Signed

To protect you and your client legally, you should have a primary contract of work signed by you and your client.

Your contract should contain your Master Service Agreement (MAS), your Scope of Work (SOW), payment terms and other terms and conditions.

Scammers are unlikely to stick around long enough to sign a contract – they are looking for quick and easy targets to make money.

If a client is willing to sign a contract, it’s less likely that they will bail on you at the end, and you have some legal recourse if they do!

4. Take A Deposit Before Starting Any Work

You should be taking a deposit from every client you engage with before starting any work.  

It just makes business sense and strengthens the business relationship you have.

Many new freelancers find it awkward asking for “money up front”. 

You shouldn’t – it’s how most business projects operate.

If a potential client refuses or makes excuses to pay a deposit, that is a big red flag, and I would likely terminate the relationship.

Ask The Right Questions and Qualify Your Leads

ask questions to qualify leads

Regardless of whether you suspect a scam or not, you should always be qualifying leads.

If you receive a cold email for a project or piece of work, ask them to complete a form on your website to quality them first.

Your form should contain just enough information for you to qualify them as being a warm lead that you can jump into a Zoom call for 15 mins to qualify further.

On my lead qualification website form, I ask the following questions:

  • What does your business do?
  • What problem do you need to solve?
  • What would be the best outcome for your business after the problem has been solved?
  • Your budget 
  • Your timescale
  • Avg monthly website users
  • Avg monthly bounce rate
  • Contact details

I send all my cold leads to this website form. 

The form allows me to judge whether or not to follow up and get more details about the project, refer them to business colleagues or press the delete button.

Avoid Scammers Conclusion

Scamming is a big business, and you can’t underestimate the havoc it causes to small companies and freelancers, so keep your guard up and qualify cold leads.

Take Action

Knowing your ideal client will help you quickly qualify or pass on cold leads.

I urge you to create at least one ideal client avatar for your business using my free Buyer Persona Guide and downloadable template.

Ideal Customer Avatar Guide

Ideal Customer Avatar (ICA)

Understand who you are selling to with my FREE easy-to-use Ideal Customer Avatar guide and template.

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