Small Business Fraud: How to Protect Your Business

Fraud doesn’t always look like a scam. In fact, the most convincing fraud often looks completely legitimate.

It may come from a familiar company, use professional language, or create a sense of urgency that makes you act before you have time to think. For small businesses, knowing what to look for can help prevent seemingly legitimate requests from becoming costly problems.

The good news is that many fraudulent schemes rely on the same basic tactics: urgency, authority, and deception.

The Three Warning Signs

Urgency

Urgency creates pressure to act quickly by claiming limited time offers, approaching deadlines, or immediate decisions are required.

Example: “Your account will be closed today unless you verify your information now.”

Authority

Authority relies on people’s tendency to trust individuals or organizations that appear knowledgeable, powerful, or official, like bank employees, government officials, or managers.

Example: Someone contacts an employee claiming to be their manager and asks them to urgently transfer money.

Deception

Deception involves deliberately presenting false, misleading, or incomplete information through impersonation, fabricated stories, or misleading claims.

Example: A scammer creates a message that looks like it came from a familiar company and directs you to a fraudulent website.

How These Tactics Work Together

These three tactics reinforce one another. Urgency pressures you to act before you have time to think clearly. Authority makes the request seem trustworthy. Deception provides a misleading story that pushes you toward the desired action.

Real Fraud Examples

Example 1: The Fake Underwriter Text

This text message claimed to be from an underwriter at Neighborhood Community Development Fund. Here’s what it looked like:

From: (313) -XXX-XXXX

“Hi [Client], This is George, the senior underwriter reaching out about the mortgage you closed out with Neighborhood Community Development. Back when you closed, you should have spoken to one of our underwriters about the mortgage protection that takes care of the mortgage if you get sick or pass away. Have you received your policy in the mail for that? Reply OUT to unsubscribe. Thanks, George Safadi”

Here are the warning signs:

Wrong area code: The text message came from a 313-area code. All our loan officers’ numbers and contacts use 412 area codes.
Unfamiliar name: If you don’t recognize the name or haven’t worked with the person before, double-check who they are. For example, if someone claims to be “George Safadi,” verify that they actually work for the organization. When in doubt, check the organization’s website or call directly using a trusted phone number.
Wrong organization name: The message says, “Neighborhood Community Development”, not Neighborhood Community Development Fund. Check the organization’s name carefully and confirm that it matches the business you know.
Services not offered: Neighborhood Community Development Fund does not offer mortgages. A message claiming otherwise should be treated as a warning sign.

Example 2: The Spoofed Email

This email claimed to be from Booking.com about a negative guest review. Here’s what it looked like:

From: Booking.com <noreply@booking-info.net>

Subject: Dissenting opinion from the guest about their venue stay

⚠️ Essential Update from Customer Service

“To the esteemed hotel staff,

As representatives of Booking, we need to inform you of crucial details. A recent guest at your hotel has posted an extremely negative review, articulating dissatisfaction with the service provided. We suggest that you login to your account right away and carry out the following actions:

Click the button below to access your account and view complaints.

Read the complaint text thoroughly and offer your response.

Verify that you’ve examined and responded to the guest’s complaint by contacting our customer support service.

Click Here to access the complaint by signing into your account

Please note that failure to address this matter promptly may result in your hotel being prohibited from using our platform. Moreover, the hotel will be excluded from featured picks and recommendations, and bookings will be suspended until a thorough investigation is completed and the issue is resolved satisfactorily.

We appreciate your understanding and immediate response.”

Here are the warning signs:

Email spoofing: The sender is titled “Booking.com” but the actual email domain is “booking-info.net.” This is called spoofing—slightly changing the domain so it looks legitimate at first glance. Real Booking.com emails come from @booking.com addresses, not @booking-info.net.
Urgency language: The message screams urgency with phrases like “Essential Update from Customer Service” and “We suggest that you login to your account right away and carry out the following actions.” This pressure is designed to make you act without thinking.
Credential harvesting: The main requested action is to “sign into your account”. This is a classic phishing tactic—scammers want your login credentials so they can access your real account.
Threats and consequences: The email warns that failure to act will result in being “prohibited from using our platform” and having “bookings suspended.” These threats are meant to scare you into compliance.

Example 3: The Tax Specialist Voicemail

This caller claimed to be a tax specialist from American Tax Specialists. Here is what it looked like:

“Hello, this is Nancy with American Tax Specialists. Today is Tuesday, July [date], and I’m calling regarding a time-sensitive matter involving unresolved tax balances or unfiled tax returns that still require your immediate attention. We are following up on a notice regarding new programs that will help reduce the amount you owe and, in some cases, resolve your tax matters altogether. These opportunities are only available for a limited time, and this could be our final attempt to reach you before they expire. Our specialists will review your situation, heat penalties removed, bring past due tax filing up to date, and explain the resolution programs that are available to you. Please call our number [redacted] as soon as possible to speak with a tax specialist. We look forward to assisting you.”

Here are the warning signs:

Urgency language: “Require your immediate attention,” “time-sensitive matter,” “final attempt before they expire.” Every phrase is designed to make you feel like you need to act right now, without taking time to verify.
Promises that are too good to be true: “Resolve your tax matters altogether,” “these opportunities are only available for a limited time,” “penalties removed.” Real tax agencies don’t promise to make your problems disappear—they work through established legal processes.
Deceptive format: The voicemail includes a specific date (“Today is Tuesday, July [date]”) and formal language (“We look forward to assisting you”) to make it sound like a trustworthy source. The professional tone is designed to build false credibility.
False authority: The caller claims to be a tax specialist from an official-sounding organization.
Vague threats: The message references “unresolved tax balances” and “unfiled tax returns” without providing specific details. Real tax agencies send official notices with specific information about what you owe.

How to Protect Your Small Business

When you receive an unexpected request, especially one that feels urgent, pause and verify:

Check the sender’s details: Look at the email domain, phone number, or area code. Does it match what you know about the organization? Scammers often use slightly altered domains or out-of-state phone numbers.
Verify independently: Call the organization directly using a number you find yourself (not from the message). This is the most reliable way to confirm whether a request is legitimate.
Look for red flags: Spoofed domains, pressure to act quickly, requests to click links or sign in, promises that sound too good to be true, unfamiliar names, or services your organization doesn’t offer.
Trust your gut: If something feels off, it probably is. Your instinct is often your best defense.

When in Doubt, Reach Out

If you’re unsure whether a message is legitimate, contact your loan officer, business advisor, or another NCDF staff member to confirm. You can also call us at 412-322-0290.