Best Practices

IASourceLink: Small Businesses Target of Online Scam

Published Jan 30, 2014

A new scam entitled 'Counterfeit check scam' is an online overseas ploy to swindle innocent Americans out of money, specifically targeting small businesses and entrepreneurs.

It starts with the scammer going online, searching for small company websites and reviewing Facebook business pages. 
They narrow their targets to industries offering specific services and begin emailing them with questions.

After a few online correspondences, the scammer agrees to do business.

Next, the con artist asks if they can send the cashier's check as a sign of good faith. Once a set amount is agreed upon, the scammer has the check sent by FedEx to the business address.

Days later, as expected, a FedEx delivery driver drops off the check. However, it is not for the agreed upfront fee, it is for much, much more.

Upon receiving the check, the business emails the scammer questioning the reason for the large amount. The scammer will explain they have more work coming, as a result they decided to send more.

The scammer will request the business deposit the check immediately then notify them once it is in the bank.

After a day or two, the scammer will send a very lengthy email in regards to a tragedy which occurred on their end, and as a result, will not need the second phase of the project completed.  Therefore, they will request a portion of the money back and ask that you wire it to them directly.

They will provide an account number to wire the money.

The business agrees and sends back the portion requested, believing the money left over is payment for services already provided. Unfortunately, days later the bank informs the business the check they deposited was bogus and was returned as 'no existing account'.

It is at this point the business accountant realizes they did not get paid for the services they provided and sent the scammer money from their own account.


There are a number of these types of scams happening all over the world, with most originating overseas. Therefore, there are a few red flags small businesses and entrepreneurs need to keep aware of before doing business with a new client:

1) Find out who they are. What is the name and address of their business? How did they get your information? What is a phone number you can get a hold of them? If the sender states they only communicate through email, that should be a red flag. Most businesses prefer to communicate face-to-face or over the phone.

2) Read emails carefully. If the dialect appears to be off, with odd phrases and missing words, this too should raise a red flag in your mind.

3) Requests for money to be sent back immediately. First of all, if a customer requests any portion of the payment back, and states they need it as soon as possible, you can almost be assured it is a scam. Most companies, with a few exceptions, want a finished product before they pay. Plus, they do not pre-pay in advance for the next phase of a project before the first part is even started. When any company sends you more than you ask for, then requests some of it back, again, that should raise a HUGE red flag in your mind.

Although this scam will eventually fade away, others will surface with new scammers trying their luck at finding victims willing to fall for their antics. Again, it is always best to do a little detective work before agreeing to anything.

Remember, as the old saying goes, when it seems too good to be true, it probably is.

Content contributed by Matthew Cassady, IASourceLinkIASourceLink is a proud affiliate of U.S. SourceLink, America's largest resource network for entrepreneurs