New initiative aims to stop scams targeting small businesses

Dental offices urged to take proactive steps

The Federal Trade Commission recently unveiled Operation Main Street: Stopping Small Business Scams, a “coordinated law enforcement and education effort” involving state and federal partners as well as the Better Business Bureau.

As part of this effort, the FTC, jointly with state attorneys general and U.S. attorneys’ offices, announced 24 actions involving “defendants who allegedly perpetrated scams against small businesses” over the past year.

In one new case, the FTC charges defendants who have made unsolicited calls to small businesses to request payment for search engine optimization services or website design and hosting services. The FTC alleges that even after a small business paid money not owed, the defendant sometimes called the business again, claiming to be a different company demanding payment for other “outstanding invoices” or claiming that the first payment was only the first installment.

Altogether, the scammers involved in the cases brought by the federal and state agencies collected $290 million from the small businesses they targeted.

Reports about scams affecting dental offices and other small businesses have appeared in recent issues of the CDA Update. Among them were an extortion scam targeting DEA registrants, a mailing threatening fines for failing to comply with a false OSHA and HIPAA training deadline, prompting CDA Practice Support to issue a special “scam alert” Tip of the Week, and a scam involving criminals who posed as Pacific Gas and Electric Co. representatives and demanded immediate payment of utility bills they claimed were past due. The latter phone scam targeted at least one dental practice in California, as CDA reported in the July Update. The practice escaped financial harm, but the call succeeded in alarming staff and disrupting the front office.

The Better Business Bureau, a partner in the new coordinated effort, is helping to alert small businesses about scams and advise on how to avoid them. The BBB published “Scams and Your Small Business Research Report” intended for small-business owners. The research included in the report suggests that “scam activity directed at small businesses is growing, that these scams pose a significant risk, and that they generally result in a higher monetary loss per incident than those targeting individuals.”

In addition to addressing questions about risk and prevalence, the BBB report gives small-business owners four recommendations to “avoid most scams” and help protect the business:

  • Train and inform employees
  • Verify invoices and payments
  • Be tech savvy
  • Know who you’re dealing with

Specific action items for each recommendation include, for example, train employees not to send passwords or sensitive information by email, limit the number of people who are authorized to place orders and pay invoices, don’t believe your caller ID, and before doing business with a new company, search the company’s name online with the term “scam” or “complaint.” Owners might also look for the company profile on bbb.org.

“Scammers want an immediate response. Don’t give it to them,” says Teresa Pichay, regulatory compliance analyst at CDA Practice Support. “Take a deep breath, research it, then act accordingly.”

Learn more about the effort on the FTC blog and download the free BBB report.

Related Items

CDA Practice Support continues to hear from members who report that they have been contacted by criminals claiming to be Drug Enforcement Administration employees. The following article published in April explains the extortion scam and how to report it to the DEA.

In a scam reported as early as February that appears to be ongoing, criminals are posing as Pacific Gas and Electric Co. representatives who either demand immediate payment of utility bills they claim are past due or attempt to cross-sell products and services, such as solar power. Initially centered in the San Francisco Bay Area, the fraudulent calls have now reached most of the state.