There are people who work hard to rip off business owners, and sadly their tactics get smarter by the day. However, this shouldn’t stop anyone from going into business.
The important thing is to familiarise yourself with the most common scams in your industry, find ways to seal all loopholes, and always be on the lookout for new developments.
In the motor trade business, some of the most common scams include the following:
Online scams can take many forms. A scammer can send you an email with a link that is meant to steal information from your computer or corrupt your files. Someone can email you pretending to be the bank or a customer asking for some crucial information.
To avoid online scams, you can take three steps.
One, ensure that all the devices you use for work are secured. Also, invest in reliable antivirus software.
Two, if you have a website, ensure it is secured against attack as well.
Finally, don’t open any emails from people you don’t know or click links sent via suspicious emails.
Scammers can send emails from addresses similar to that of your bank and change only a few characters. Therefore, always double check even the spelling of the email address.
You should avoid giving out sensitive information via email too.
If you get an email asking for sensitive information, call the person by phone or meet them in person to know exactly what they want. Use the phone number you have and not the one included in the suspicious email.
Payment scams too can take a number of forms. You can come across credit card scams, fake cheques, identity theft and fake currencies among many others. Don’t be in a hurry when processing payments.
Take time to know your customer and verify the payment before you finalise the deal. One payment scam can affect your finances significantly and ruin your reputation, so don’t rush through the process.
Stolen car scams
If you are dealing with second-hand cars, beware of people who steal cars and sell them to dealers. Take your time when buying second-hand cars and counter check everything to ensure you are getting a legit deal.
For your garage, get some security measures to ensure no car gets stolen. CCTV and a good gate can keep the customers’ cars safe while they are in your possession.
Write off scams
Some cars that have been damaged and fully written off at times end up finding their way back to the market. If you are not discerning, you may end up buying these cars for resale.
And when the damage becomes evident later, it will be a big loss for you.
Motor trade insurance scams
Ghost broking is becoming very common these days. Fraudsters are targeting car owners and sellers with super attractive deals.
They will even forge the documents that you believe that you are buying a real policy. You can easily fall for such scams when you pay attention to the price only and ignore the provider.
It is okay to shop around in order to find a good deal on your motor trade insurance, but the best way to compare quotes from genuine insurance providers is to use a price comparison site like Quotezone.co.uk.
This website is FCA-authorised, as are the insurance companies and brokers it works with, so you can be confident you aren’t dealing with a ghost broker.
This is a common scam that targets new and small business owners.
Scammers know that start-ups face a lot of financial challenges, especially within the first few months in business.
They also know that it might be tough to get loans from banks and other top lending institutions. Therefore, they will come up with very attractive deals to try and attract the desperate and unsuspecting business owner.
You can easily spot a scammer because most of them will ask you to pay some money upfront so that your loan can be processed.
They also want to get through the process as fast as possible.
Others may give you the loan, but at a very high cost. Before you get a loan from any lender, check if they are legit and have a good reputation. Know how much the loan will cost and what they payment terms are.
Once you understand how scammers can fool you, have measures in place to avoid them. When the deal looks too good to be true or suspicious, it is better to let it go than risk losing huge sums of money.
Insurance companies may not cover some of the losses that you incur, especially if they arise from something that was in your control.
Thus, even with a comprehensive cover for your business, you should put some measure in place to stay safe.