Scams Startups Need to be Aware Of

Starting your own business is never easy, but it can be made even harder by scammers that are trying to trick you into parting with your money. Startups are often targeted by criminals because they’re seen as less experienced than bigger businesses, but by educating yourself about some common scams, you’ll be in a much better place to avoid startup scams and ensure the success of your venture. 

One of the most common ways that criminals reach out to startups is through phone calls, which is why it’s so important to be wary of unknown numbers. Rather than answering calls from numbers you don’t recognise, use a website like unknownphone.com to try and figure out who is calling. Services like this will show you whether others have had bad experiences with the number that rang you, so you can block them before getting into trouble.

Whether you think you’ve been targeted by fraudsters before or just want to be on the lookout for anything that could potentially go wrong, this blog will go through some common startup scams to help you avoid them in the future.

Late tax payment hoaxes

Everyone knows that failing to pay your taxes can have huge consequences, which is why scammers use this as a way to get your money. You might receive a call, letter or e-mail telling you that you need to pay a fine for paying your taxes too late. The amount could be big or small, but whatever it is you must not pay it. Once the fraudsters have your details, they’ll be able to empty your bank account. Always check with the tax office before responding to these notices, as they’re likely to be fake.

Company registration scam

Sometimes criminals try to get you to part with your money by telling you that your company has been registered incorrectly or that you need to pay a fee to carry on operating/trading. These letters can look very real, so lots of startups don’t hesitate to pay just in case their business is closed down. The early months and years of running a business are tough, so the last thing you want is to have to suspend operations and trading. Much like with the tax hoax, you need to reach out to the relevant body to let them know what’s happening.

The fake investment opportunity

Startups are often looking for funds, so criminals take advantage of this and present entrepreneurs with ways to grow their cash quickly. These scammers will sometimes ask you to pay money into what looks like a promising investment opportunity, allowing you to grow your funds and launch your startup. Needless to say, get rich quick schemes seldom have good results and you’re likely to lose all your money in the process. Stick to dealing with real investors who have money to spend on your business to help it to grow.

Remember that no matter the contents of a phone call, e-mail or letter, you need to think critically before you take action. This way, you can avoid startup scams and keep your business safe.