Small business owners targeted by fake government worker scam

Small businesses can be seen as an easy target for scammers. Unlike large companies, who often have the resources to protect themselves, small business owners can fall victim to certain types of scams, including: 

• Fraudsters adopt familiar identities to deceive you into paying, often masquerading as trusted companies or government entities. However, their intentions are fraudulent.
• They employ tactics such as urgency, intimidation, and fear to pressure you into immediate action, preventing thorough verification of their claims.
• Their preferred payment methods typically involve wire transfers, cryptocurrency, or gift cards. Reject any demands for payment through these channels, as they are indicative of fraudulent activities.

The latest scam small business owners need to be aware of involves scammers posing as fake government employees. 

Similar to imposters posing as government officials, these new fraudsters operate through mail rather than phone calls. Leveraging sophisticated graphics software, they create convincing counterfeit forms and letters purportedly from fictitious agencies, demanding swift payment from small business owners.

These fraudulent government letters feature agency names containing terms like “United States,” “business regulation,” and “trademark symbol” to enhance their credibility. 

They deceive recipients into believing it’s time to register or renew a business license or trademark, directing them to a website soliciting sensitive information such as license, Social Security, EIN, and credit card numbers. Often, these letters threaten fines for delayed response.

Ironically, there are readily available “federal agency name” generators online that can quickly concoct names like Domestic Investigation Service, Homeland Fraud Service, and the National Corruption Department.

Before taking any action, if you receive a government-sounding letter demanding money or personal information, pause. Verify the legitimacy of the agency before responding.

Bridget Small, consumer education specialist, at the Federal Trade Commission (FTC, a real agency), said in a statement aimed at small business owners, “Go to USA.gov to verify the names and contact information of federal, state, and local, government agencies. 

Don’t use any websites or phone numbers listed in the letter. Know that the government will never ask you to wire money with services like Western Union or MoneyGram, or pay with gift cards, cryptocurrency, or a payment app. Only scammers will because it’s hard to track that money and hard to get it back.”