For every hard working Joe out there, there is a non-working John that wants to take advantage, scam, and defraud Joe worker. Unfortunate as it may be, it is one of the oldest ways to make a few ends meet.
There are actually plenty of people interested in scamming you out of your entire life’s savings, your retirement, your newly obtained business loan, and any other source of income or excess cash you may have lying around. So what do you do to work around this?
The most important thing you can do is think clearly about the choices you will make with your business’s cash flow. Really? Thinking is your best weapon? Ummmm, yes, it is actually. I know there are plenty of people out there who do not think about anything but what the next generation iPad will do for them, but really, thinking is the best weapon you have against fraud.
The old saying of ‘if it’s too good to be true, it probably is,’ is correct. If you have a vendor who is quoting you prices for less than half of what another vendor is charging for the very same items, chances are good there’s something missing. Possibly they don’t include delivery charges, or their products are actually knock offs of the brand you’ve requested. Maybe they are uninsured, and if there is a disaster and your shipment is lost, you’ll be stuck holding the bag. There are any number of things that can factor into the prices a vendor is charging you, but the point is that you have think about what they are offering. This is never more relevant than when you are dealing with people overseas. Unfortunately, because of international trade regulations, and the difficulty in enforcing them, if someone overseas is scamming you, you’ll have little to no affordable recourse to recoup your losses. So you have to think about your dealings very carefully.
In addition to just thinking about something, and asking yourself if the deal seems too good to be true, research is extremely important. If references are required in order to obtain a new employee, why would they not be required within new business deals? If you’ve never heard of someone, ask around about them. Google their name or business name. The Internet is a massive record keeper. Google wants to be the biggest search engine available to you, so they rarely clean their file cabinets out and dump old content. Google is the ultimately pack rat, so if you need to find something, chances are good Google has it on file. You could come across that one piece of information from a decade ago that tells you this person is not the right person to do business with. Granted, that information could be correct or way off base, or you may be able to decide that if it is too dated, it just not relevant and therefore not a good example of your vendor’s character. Regardless of how you process the information, you have to at least find it first. If you’ll research the new iPad and it’s features, and reviews, you have to do the same for your business dealings.
So you’ve put plenty of thought into the deal, and you’ve researched your vendor, and your ready to move forward. Who is to stop the vendor from running away with your cash at that point? Almost no one. And keep in mind that if you do business with someone who is headquartered outside of your area, if there any problems with the deal, you’ll have to go to their area to file suit against them. The best way to handle at least the initial transaction is through a secure service for escrow. Yes, just like your mortgage uses and escrow account, your business can too. The services are not free, of course, but it is a secure way to pay for your product and without running the risk of never getting your product, or losing your money all together. Never ever provide your credit card data to any new vendor of the phone, email, fax etc if you are unsure about their trustworthiness. You’ll be setting yourself up for disaster in that case. You never know what some disgruntled employee may feel like doing with your credit card data.
Once you’ve completed one or two deals with a new vendor, they aren’t new anymore, and you should have a certain level of confidence that they will provide the product or service they say they will, and your financial data is safe with them. Being scammed happens to people and business owners all the time. It doesn’t mean it is unavoidable though. With some thought, some research, and precautions, you can easily ensure that your business will not be taken advantage of, and you’ll create strong vendor relations for the long term.