In down economic times, scams against business owners and individuals rise.
During periods of economic stress, firms and individuals become more open to various scams and rip-offs. The pressure to maintain a certain economic level pressures managers and employees into making decisions that they would not ordinarily consider.
In a recent focus group conducted by Information Strategies, Inc., this newsletter's parent company, managers who have been successful in past down turns warned against this trend.
These managers, across five industries and in four geographic locations said they either had done or knew of such happenings in previous down cycles.
Among the scams they reported:
- Account receivable purchase offers that made their checking accounts vulnerable.
- Staffing proposals permitted outside thieves to access their company IT operations.
- Funding proposals that required upfront fees.
- Offers to purchase some or all of the business which resulted in lost customers.
- Real estate purchase offers that fraudalently conveyed the properties to others.
- Offers of reduced costs in supplies or services that failed to deliver.
- Increase in listing offers for marketing purposes in fake directories or other marketing venues.
- Healthcare benefit cost reduction that accepted premiums but did not buy coverage.
- Purchase of distressed or unsold merchandise with fraudulent checks.
Along with these outside attacks, these managers reported that thefts and other negative acts increase as employees become more frightened about their positions.
These acts are particularly possible as companies shed outside contractors and focus on keeping internal staff.
For more on how to grow a business in downtimes, readers can receive a free report available from this newsletter's parent, Information Strategies Inc., 10 Effective Strategies For Growing Your Business In Downtimes. It is available free by clicking here: http://www.is-incorp.com/forms/pdf_signup.aspx.