North Carolina Department of Justiceskip to main content
North Carolina Department of Justice
North Carolina Department of Justice
Submit this request

Small Business Scams


Fake Invoices
Small businesses regularly receive invoices for goods and services, and scammers are taking advantage. Employees sometimes receive and pay bills that look legitimate before checking to make sure that they really are. 
  • Here are common invoice scams to avoid:
Solicitations that look like invoices. The fine print asks you to sign up for new, overpriced subscriptions or services.
  • Requests for your business’s updated contact information. These mailers or faxes ask you to update or verify your business’s contact information for a directory listing. By signing, you agree to pay for a new, overpriced listing.
  • False invoices that ask you to pay for office supplies or telecommunications services your business never received.
  • Invoices for supplies you never ordered. Under NC law, you don’t have to pay for or return items you receive but didn’t ask for. 
 
“Expiring” Web Addresses
Look out for mailers or emails that urge you to pay a web domain or address renewal fee. The messages often threaten that your business could lose its web address if you don’t pay immediately. Don’t feel pressured to pay the fee before asking questions, verifying the company requesting payment, and confirming that your web address is actually due to expire.
 
Patent trolls
Patent trolls buy inexpensive patents and use them to make questionable claims on money from other legitimate businesses. These scammers target small businesses that use off-the-shelf commercial products that rely on common technology, like printers, scanners, and wireless routers. Patent trolls then send letters to business owners warning them to pay a fee for infringing on the patent or face a lawsuit.
 
Patent trolls are often successful at getting victims to pay them because defending complex patent lawsuits can be expensive. Many small businesses feel pressured to pay the fee to avoid legal costs, even though no money is owed and the patent troll may not really carry through on their threat to sue.
 
Phony Loans & Grants
Many small businesses could use extra funding. Scammers know this, so they send emails, faxes, or even credit cards through the mail offering what they claim is a fast and simple way to get a loan or grant. They’ll claim your business can get a short term loan with no collateral or even thousands of dollars in government-funded grants. In most cases, you’re asked to pay an upfront fee. Once you pay, you’ll quickly learn that loan or grant doesn’t really exist. Or, there are excessive fees associated with the loan, and you could have received a much better rate by shopping around.  Don’t allow your business to be tricked by what sounds like an easy way to secure funding.
 
Your Boss’s Boss
In this scam, an employee receives phony emails from someone pretending to be their boss’s boss. The scammer counts on the employee being surprised and intimidated to receive an email directly from someone higher up in the company and hopes that the recipient won’t second-guess the order to wire a large amount of money to a client or vendor. Some companies have lost thousands of dollars to this scam, which is usually received directly by the scammer and is lost for good.
 
How to reduce your risk of becoming a victim of a small business scam:
  • Warn your employees about scams. Make sure your staff knows how to identify and report potential frauds.
  • If a deal sounds too good to be true, it probably is. Beware of unsolicited emails, faxes, phone calls, or sales pitches that offer unrealistic deals.
  • Know who you’re working with. Verify the identity of any company, agency, or bank that contacts your company before you decide to do business with them. Verify vendors and other businesses by checking with the Better Business Bureau or the North Carolina Secretary of State Corporations Division.
  • Check invoices carefully before you pay. Review the listed charges and the name of the business or supplier. Don’t get pressured into paying an invoice before you’ve verified it.
  • Watch your business’s finances closely. Limit the number of employees who are authorized to place orders, pay invoices, and make purchases for your company. Set strict workplace policies about wire transfers and other payment methods.
  • Avoid paying money upfront. Be skeptical of anyone who asks you to pay upfront fees for supplies or services. This is often a sign of a scam.
  • Stay away from suspicious websites and emails. If you’re asked to enter information like passwords or account numbers for unspecified reasons, close the website or email immediately. You can avoid falling victim to a phishing scam by deleting emails that come from unfamiliar senders.

You can also verify vendors and other businesses by checking with one of the following agencies:  
We Can Help
If you think you've been a victim of a small business scam, or spot a potential scam or bad business practice, file a complaint with our office or call us toll free within North Carolina at 1-877-5-NO-SCAM.