The Federation of Small Businesses (FSB) is calling on ministers to furnish small firms with safeguards from dishonest scams. It says the government's plans to protect consumers from shady dealers should extend to small businesses, otherwise they will continue to fall foul of the criminals.
The call came as the Office of Fair Trading (OFT) launched 'scam awareness month' - a campaign to alert the public to deceptive and fraudulent mass marketed scams. The OFT has the power to serve 'Stop Now Orders' on con artists who swindle consumers. But a clause in the 2002 Enterprise Act excludes businesses and the self-employed from similar protection.
Small firms are more vulnerable to scams because they have fewer resources to conduct background checks on business partners, nor, so the FSB argues, check all their correspondence thoroughly. In the last year, a range of scams have targeted SMEs, including the European City Guide fiddle, in which firms were invited to list themselves, but were subsequently charged for the privilege.
In another con, official-looking documents were sent out to small businesses by an organisation claiming to be an official health and safety group. It said they were in breach of safety rules and demanded hundreds of pounds in 'registration' payments. FSB trade and industry chairman Tina Sommer said: "The aim of scam month is to arm consumers with the knowledge and skills necessary to recognise and report scams - but what about small firms? Fraudsters are increasingly aware that small business owners must do two full time jobs - run their firm and also comply with ever increasing regulations and red tape."
The OFT has published a list of 10 scams to look out for. They include telephone lottery scams, premium rate number prize draws and pyramid schemes.