Small businesses are prime targets for online scams, from invoice fraud to phishing attacks. Scammers know owners juggle too much to spot every red flag.
Good news: Even simple steps — such as training staff, double-checking payments and using secure tools — can shut down scams before they cause serious damage.
That is precious consolation for Tom Reid who finds himself vulnerable in two big ways. He consults and teaches about federal government contracting. He also has made himself a go-to person for anything about leadership.
Protect Data, Build Trust
Reid has spent years chasing the elusive leadership ideal and translating it into a detailed work breakdown structure, or WBS. From that, he created “Sustained Leader WBS,” a comprehensive tool with 229 elements to assess and improve leadership potential.
Security breaches are the last thing he — or any other entrepreneur — needs to endanger his corporate life. Because of that, Reid has a healthy aversion to suspicious scam email or messages.
“If it’s addressed to me, it’s suspicious,” he said. “You can’t let your guard down for a moment.”
This is a digital anxiety shared with Ivana Taylor and Iva Ignjatovic. Taylor runs DIYMarketers, “committed to helping small-business owners escape overwhelm.” Ignjatovic is a marketing, strategy and business consultant.
Each of them discussed ways to protect businesses from online scams.
“I’m overwhelmed by spam text messages,” Taylor said. “My text messages are my ‘intimate’ space, and it makes me nuts when I get these.
“Scam emails are getting really good,” she said. “I get them from Amazon, and now calendar notices for bitcoin purchases — that aren’t happening. It just goes on and on.”
Everyone is Vulnerable
Even experts aren’t immune to the phishy onslaught.
“I know several people who are really tech savvy and pay attention to many things, yet they were scammed,” Ignjatovic said. “They managed to get their money back, but it was a hassle.”
Greatest online scam risks are those that target companies where it hurts the most.
“It’s anything that can access our bank accounts,” Reid said. “Computer corruption, phone corruption and bank account corruption can bring a business to an instant stop. Recovery may or may not be possible.”
For small and medium businesses, the biggest online scam risk right now is business email compromise, or BEC.
When Data Knows Too Much
Combined with impersonation or social engineering attacks — basically, someone posing as a trusted party such as a vendor, partner or internal exec — scammers trick a business into making payments, handing over access or sharing sensitive info. It’s low-tech in many cases, but highly effective.
Scammers use increasingly polished tools, including artificial intelligence, phony websites and convincing emails, to impersonate trusted people or brands. Because messages often look “real enough,” businesses may act instinctively, especially under time pressure — making BEC a consistent major threat.
In one case, a Texas manufacturing company lost nearly $400,000 after scammers impersonated a long-time supplier using a nearly identical email domain. The fake “vendor” sent a routine invoice — but with updated bank details.
Because the tone and invoice matched past correspondence, the accounting team wired the funds without question. By the time the fraud was discovered, the money was gone.
Everyday Online Scams Evolve Fast
According to the FBI’s Internet Crime Complaint Center, business email compromise scams like this are among the costliest forms of cybercrime, with losses totaling $2.94 billion in 2023 alone.
“With so many security breaches and every company literally forcing you to do business online, scamming is inevitable,” Taylor said. “I don’t think there’s a fix. Even with identity insurance — when you read the fine print — you are screwed.
“Phishing emails look so real and catch people off guard,” she said.
A 2024 report from Sift’s Digital Trust Index found that 76 percent of fraud and risk professionals believe their business has been targeted by fraud involving AI, often tied into impersonation, phishing or social engineering.
“Fake invoices or vendor impersonations trick you where you least expect,” Ignjatovic said. “It’s so bad that when I use passwords for anything, I make sure my PC camera is not facing my screen.”
Cleaning Up Digital Privacy Never Ends
Scams often hide behind urgency or pressure — “act now,” “limited time” or “verify your account.” Small businesses can stay safe by double-checking senders, avoiding links in suspicious emails and confirming requests directly with vendors or banks.
“Always verify sender addresses and URLs carefully,” Taylor said. “I have contacted my bank or a client more than once to make sure they were actually trying to reach me.”
In 2023, the FTC received over 330,000 reports of business impersonation scams, with claimed losses exceeding $1.1 billion.
“Trust your gut,” Ignjatovic said. “If it feels off, double check.”
Essential Protection
Certain tools or practices offer at least the hope of cybercrime prevention for small businesses.
“It’s a constant cat-and-mouse game,” Reid said. “As soon as we develop a new protection, hackers beat it and we start all over again.
“In my field we have the same problem when weapon systems are infiltrated by our political enemies before they are even deployed,” he said.
Protect What Matters in the Real World
To stay safe from scams, businesses need a combo of smart tools and disciplined habits — not just one or the other. Some of the most effective practices include:
Use multi-factor authentication, or MFA, everywhere sensitive access is possible such as financial accounts, admin panels and so on. Even a strong password alone often isn’t enough.
Employ password managers to prevent weak or reused passwords.
Keep devices and software up to date — patching vulnerabilities quickly reduces the risk of hackers taking advantage of known holes.
Install and maintain good email security tools — spam and phishing filters, link checking, spoof detection — to stop phishing or impersonation attempts before they land in someone’s inbox.
Devise regular backups and disaster recovery plans so that if something goes wrong — like ransomware — users can restore systems without paying or losing everything.
Do risk assessments and vulnerability scans to find weak spots before attackers do. Even tools or services that test a network or simulate attacks — pen testing — helps expose trouble early.
Train staff on what scams look like — mock phishing tests, regular reminders and a culture that encourages questioning weird requests rather than obeying them instantly.
Lessons Given, Lessons Lost
“It’s often a small population of bad actors who ruin it for everyone,” Taylor said. “I wonder why we never learn.
“Multi-factor authentication is a must,” she said. “It’s just so annoying that because of the bad guys, everyone gets inconvenienced.”
In one mini case study, a company discovered that hackers had harvested employee credentials from a third-party site and then tried to use those login and password pairs to access its systems.
Because the company had multi-factor authentication enabled, the attackers hit a roadblock — they could not complete the second authentication step, and their access attempt failed. The MFA layer essentially stopped the breach in its tracks.
Beware of Festive Cyber Grinches
In a large study of Microsoft Azure Active Directory users, researchers found that enabling MFA reduced the risk of account compromise by 99.22 percent — even when credentials were leaked.
“Strong spam filters and regular software updates go a long way,” Ignjatovic said. “When I have to log in to a clients’ account, it can be super complicated.
“It’s people who most of the time make a security mistake,” she said. “Training is a must, and it should be available twice a year, at least.”
Business owners who suspect they’ve been scammed should act quickly.
“Lock things down, change passwords and contact the managers of accounts that might have been impacted,” Reid said. “These include credit cards and auto-pay accounts,”
Report the scam to the Federal Trade Commission and local authorities. Document everything for follow-up and warn staff so it doesn’t spread further.
Inconvenient but Necessary
“The best thing I did was lock down my credit reports,” Taylor said. “This has saved us a ton, even though unlocking it is really hard. That keeps us from unnecessarily opening up new accounts.
“I’d love to use better passwords, but it’s just so hard to log in if you don’t have a password manager,” she said.
A U.S. company discovered that an attacker posing as a trusted vendor had emailed a change-of-bank-account request.
The fraud attempt looked convincing and matched past correspondence, but the company’s finance team paused, verified the request via the vendor’s known phone number — not the number in the email — and flagged it as suspicious.
As a result, they prevented a wire transfer of $300,000 that would have gone to the scammer’s account. Because they acted promptly and verified off email, they avoided a costly loss.
Daily Practices Pay Off
“Make cybersecurity part of your culture, not just a checklist,” Taylor said.
Use two-step verification everywhere possible. It’s one of the easiest and most effective ways to block hackers, even if a password leaks. Add regular software updates for a strong first line of defense.
According to Microsoft research, more than 99.9 percent of compromised accounts did not have multi-factor authentication enabled.
Business People Seek Protection Against Threat of Cyber Attacks
“Back up your data regularly — don’t wait until it’s too late,” Ignjatovic said. “Most of the time people and businesses fall into a trap because they think it won’t happen to them, and they just check the box.”
Online scams are evolving fast, but prevention still comes down to awareness, caution and consistency. Small businesses that stay alert — verifying requests, updating systems and using tools like multi-factor authentication — can stay ahead of most threats.
Digital safety isn’t just a tech issue; it’s a trust issue. Protecting data protects reputation, customers and the future of the business itself.