Business Impersonation Scams Are on the Rise. Here’s How to Protect Yourself

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Business impersonation scams cost victims $660 million in 2023. Learn how to spot these scams, protect your info, and safeguard your finances from fraud. [[{“value”:”

Business impersonation scams are the most reported type of financial fraud. According to a May report by the Federal Trade Commission (FTC), about 332,000 people fell victim to these scams in 2023, resulting in over $660 million in reported losses.

This alarming number highlights the need for individuals and businesses to learn what these scams look like — and how to protect their savings and investment accounts from fraud.

How do business impersonation scams work?

Business impersonation scams involve fraudsters pretending to represent well-known companies or government agencies. Think of the well-known scam where someone claiming to be from Microsoft calls to say you have a virus and is happy to walk you through how to remove it, but on a larger scale.

These types of scams can take many forms, but the goal is the same: to deceive victims into giving away sensitive information, transferring money, or providing access to company systems.

For example, you might get an email that looks as if it’s from a well-known bank offering a higher-than-average interest rate. You click the link and enter your details — like your Social Security number and bank account information — that the scammers use to steal your identity or drain your account.

Or you might get an email that looks like it’s from your company’s IT department asking you to reset your email password. When you click to “reset” your password, you’re actually giving the fraudsters access to your email, which they can use to send emails in your name or hack into the network.

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How to protect yourself from business impersonation scams

Business impersonation scams are often easy to spot — if you know what to look for. If you get an email from a legitimate business, look at the sender email address carefully. Scammers might use random numbers and letters in their email addresses, or they might use similar but slightly off addresses like “microsoftsupport@gmail.com.” (A real email is likely to use @<businessname>.com, not a Gmail account.)

Be cautious of any text, email, or phone call that creates a sense of urgency, such as threatening to disconnect your service, warnings about suspicious activity, or threats to send to law enforcement. Scammers often use this tactic to scare their targets into taking a risky action.

Set up multi-factor authentication (MFA) on every account that offers it. Most investment apps, savings accounts, and brokerage accounts allow you to set up MFA, which requires a key from an authentication app or code from a text message to log in, in addition to your password.

Keep a close eye on all your financial accounts. Look for unauthorized access, charges you don’t recognize, or logins from odd locations. If anything seems off, call your financial institution using the phone number on your card or statement. Avoid calling a number included in an email when things are suspicious — scammers may send you a number that connects you to them, not your bank.

If you own a business, make sure your employees also know what to look out for. Regularly update your team on new scam tactics, and encourage them to double-check any requests from leadership to send money or gift cards.

Report suspected fraud to the FTC

If you suspect you’ve been targeted by a business impersonation scam, report it to the FTC and the impersonated company. This helps authorities track scam trends and warn the public about what to look for.

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