How to Protect Yourself from Common Business Scams

You’ve worked hard to build your business, and it’s paying off. But a thriving business can also attract the wrong kind of attention. Scammers often target small businesses, assuming they have fewer security resources than larger corporations, and the stakes are real.

The best thing you can do is stay one step ahead. Understanding how these scams work—and putting a few smart protections in place—can mean the difference between a close call and a costly mistake. Many of these scams rely on the same fraudster tactics like impersonation, urgency and exploiting routine business processes.

7 common scams targeting small businesses

Scams that target small businesses are increasingly common, and even cautious businesses can fall victim to these schemes. Stay aware and vigilant and keep an eye out for these common types of scams targeting small businesses.

1. Business email compromise

Business email compromise (BEC) happens when a criminal impersonates a business owner, executive or senior employee over email. The goal is usually to trick employees into authorizing a wire money transfer or sharing sensitive information. These emails can look surprisingly legitimate, employing the same logo, a similar email address or a familiar tone.

BEC is one of the most expensive scams out there because it targets trust. By the time you realize something is wrong, the money may be gone. The FBI reported that BEC alone cost U.S. businesses close to $2.8 billion in 2024. If your business regularly handles wire transfers or vendor payments, you’re a prime target. Using dual control, which requires 2 people to review and approve wire transfers or large payments, can lower the risk of unauthorized transactions. Watch out for these red flags:

• Urgent requests to transfer money or change payment details
• Slight variations in email addresses (name@cornpany.com vs. name@company.com)
• Pressure to keep the request confidential or act before verifying

2. Phishing

Phishing scams use fake emails or text messages to steal login credentials, financial information or access to your systems. When these messages arrive by text instead of email, the tactic is known as smishing. They often look like they’re coming from a bank, a software provider or even a colleague. The message usually creates a sense of urgency, saying things like your account is compromised, a payment failed, action is required immediately, etc.

Cyber scammers often use routine password update requests and other messages to trick employees into revealing confidential or sensitive information. One click on a malicious link can compromise your network, exposing customer data, financial accounts and proprietary information all at once. In some cases, phishing attacks can also lead to identity theft, allowing criminals to open new accounts or misuse personal and business information.

3. Fake invoices

This scam involves phony invoices sent to your business for products or services you never ordered. The amounts are often small enough to slip past a busy accounting department without a second look—sometimes as little as a few dollars. Over time, these small amounts can add up to significant losses.

Businesses that sell products or services online, including those operating e-commerce platforms, may be especially vulnerable because of the high volume of digital transactions that may involve sensitive consumer and business information.

It’s common precisely because it’s easy to pull off. Scammers research your vendors and mimic their invoices closely. They’re counting on the fact that small teams don’t always have time to verify every charge.

4. Automated Clearing House (ACH) fraud

ACH fraud happens when scammers make unauthorized electronic withdrawals from your business bank account. Criminals typically gain access through phishing, malware or stolen credentials. Then, they make transfers that quietly and quickly move money out of your account.

Unlike credit card fraud, ACH transactions can be harder to reverse. While some card transactions may allow for a chargeback, ACH fraud is often more difficult to resolve once funds have left the account. Small businesses are especially vulnerable because they may not monitor accounts daily. Here’s what makes ACH fraud particularly damaging:

• Transfers can be made in small amounts to avoid detection
• Funds can move internationally, making recovery difficult
• Multiple withdrawals can happen before anyone notices

5. Payroll diversion

In this scam, attackers pose as employees and contact your payroll department to request a change to their direct deposit information. The new account belongs to the scammer, while the real employee never receives their paycheck. It’s a scam that causes immediate financial harm and can seriously damage employee trust.

Payroll diversion works because it exploits routine processes your team handles regularly. Payroll staff are used to fielding these kinds of requests, which makes it easy to let one slip through without proper verification. By the time the real employee notices the missing payment, the funds are usually long gone.

6. Tech support scams

Tech support scams typically start with an urgent call or an alarming pop-up message pretending to be from a well-known company, claiming there’s a problem with your computer security. The “technician” on the other end asks for remote access to fix the issue. Then, they use that access to steal data, install malware, access sensitive data or lock you out of your own systems entirely.

These scams work because they create a sense of panic. When something seems wrong with your systems, the instinct is to act fast. Scammers count on that urgency to bypass your better judgment. Be especially wary if you encounter any of the following:

• A pop-up message with a phone number to call for urgent technical help
• An unsolicited call from someone claiming to represent Microsoft™, Apple™, etc.^{Footnote [1]}
• Requests to download software or grant remote access to fix a problem

7. IRS impersonation scams

In this scam, someone contacts you claiming to be from the IRS or another government agency and demands immediate payment for back taxes, penalties or other supposed debts. They may claim you owe money or must pay a fee immediately to avoid suspension of your business licenses or other legal consequences. They may threaten legal action, arrest or business shutdown if you don’t comply.

Often, these scams seem to ramp up around tax season, but thieves can run them year round. By posing as IRS representatives and using urgency and authority, they can pressure even savvy business owners into acting quickly. Note that the IRS will never do any of the following:

• Demand immediate payment without first mailing you a bill
• Require a specific payment method, like gift cards or wire transfers
• Threaten to involve law enforcement for non-payment over the phone

What to do right now if you suspect a scam

If something doesn’t feel right, trust your gut and plan out a response. The faster you respond, the better your chances of limiting the damage.

Step 1: Contact your financial institution

Ask them to freeze or lock any affected accounts. They have a much better chance of recovering funds when they’re notified promptly, so don’t wait.

Step 2: Change your passwords

Start with your email and any financial accounts, then work through the rest. Enable MFA on everything to better protect your accounts.

Step 3: Preserve your evidence

Don’t delete suspicious emails, text messages or transaction records. Screenshot anything unusual and save everything. This documentation will be important when you report the incident. When you call your bank, have the following items ready:

• The date and amount of any suspicious transactions
• The name or email address of anyone who contacted you
• Any relevant account numbers or invoice details
• Copies of suspicious emails, messages or documents

Step 4: Report it

File a complaint with the FBI’s Internet Crime Complaint Center (IC3) and report the scam to the Federal Trade Commission. If the scam involved IRS impersonation, report it to the Treasury Inspector General.

Step 5: Review your insurance coverage

A single cyberattack can cost a small business thousands of dollars in recovery costs, lost revenue and legal fees—far more than most cyber insurance policies cost annually. If you don’t already have cyber liability coverage, talk to your insurance provider about adding it as a standalone policy or an add-on to your existing plan.

Protect your business with Navy Federal Credit Union

Don’t wait to become a target; the best protection is proactive. We give you real tools to monitor your accounts, move fast when something looks wrong and stay informed with resources built around the issues small business owners face.

As part of those resources, Navy Federal offers business insurance options through Navy Federal Investment Services (NFIS).

Ready to protect what you’ve built? Explore our guide on protecting your business from cyberattacks. Then, visit our business services page to see everything we offer to help you keep your business running smoothly and safely.