How to Spot Scams in Your Contracting Business

In your personal life, you’ve probably learned how to spot a few scams. It helps you avoid financial loss and major embarrassment. But you should also know that there are people who will target businesses with scams, too. Here are a few red flags you should watch for, as well as a few ways you can protect yourself.

Asking for Personal Information
Like many personal finance scams, business scams often operate around getting access to your sensitive data. For example, a scammer might send you an email or a text message pretending to be from your bank or other trusted institution. They make a claim about something related to your account, and offer a link for you to provide your login credentials. If you fall for it, they may gain access to your account information. To avoid this problem, don’t click on links provided in emails. If you’re not sure whether or not the communication is real, log into the account the way you normally would.

Using Abnormal Forms of Communication
Financial institutions usually have preferred methods for communication, and they will often make these clear on their website. Scammers might take advantage of an unusual type of communication as a way to catch you off-guard and make it easier to bypass your natural defenses. For example, you might not think anything of a spam email or letter that comes to your business mailbox. But what about a text or a phone call? The IRS is famous for repeating that it never requests sensitive information over the phone. They do this because so many scammers use that method to get people’s information. In short, if it’s not the normal way that your financial institution would contact you, you should not consider it a safe method.

Refusing to Put Details in Writing
Although many of the most common scams come in the form of phishing, there are other types that you should be aware of as well. As a business, you may interact with lots of other businesses that provide products and services. Some of them may be legit, while others might not. One way that you can tell that someone is not dealing with you on the level is a lack of written evidence of any negotiation. Someone who is planning to take your money and run, or provide you a shoddy service for the money, wants as little of a paper trail as possible. If they ask you to take their word for it or promise to give written records after the fact, it’s wise to refuse agreement.

Pitching Fake Services
As a small business owner, you may be meeting a lot of responsibilities for your company and therefore don’t have a lot of time to research. Sometimes, someone running a scam will offer to perform a service that they convince you is necessary. It might include placement in a directory or participation in some kind of awards program. And after you have made a deposit or another form of payment, you discover that the thing you’ve signed up for doesn’t actually exist. These scams can be pretty common, so you’ll want to watch out for them. Every time you get an offer for a service like this, do some research into it and see if it actually benefits your business.

Making Unrealistic or Illegal Offers
As a general rule, if an offer seems too good to be true, then it probably is. Some scammers will offer to handle certain aspects of your brand management, by eliminating negative feedback or providing positive reviews for your business. Even under the best intentions, services like this can be sketchy. In certain instances, they are also illegal. Just keep in mind that nothing in business is truly free and services that promise you the world are unlikely to be able to deliver it. Always ask for references and follow up on offers before you make any commitments.

Running a successful contracting business includes being able to spot the most common scams targeting businesses. For more information about getting ready to become a licensed contractor, visit CSLS today!

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About CSLS

Contractors State License Service (CSLS) is the largest school in California devoted to the Construction professional. For over 23 years, CSLS has helped its students pass the exam to become licensed contractors in the State of California, licensing more students than any other school. From our main offices in Southern California, CSLS operates over 25 locations with full-service support and classrooms. We have grown to this extent by providing quality, professional services. In comparison, this provides 7 times the number of convenient locations than the second largest contractor school. Contractors State License Services is one of the only contractor schools in the state that is run by educators, not lawyers or people mostly interested in the bonding and insurance business. Contractors State License Services formerly operated under the oversight of the State of California's Bureau for Private Post Secondary and Vocational Education. As of January 1 2010, the new Bureau for Private Postsecondary Education (BPPE) came into existence replacing the BPPVE. CSLS now operates under the provisions of the California Private Postsecondary Education Act of 2009 (CPPEA), Article 4 Section 94874(f). Our Mission is simple; We can help you pass your California Contractors License Exam. Celebrating our 25th year, CSLS has helped over 120,000 students pass the California contractor licensing exam to become licensed contractors in the State of California. Additionally, we offer complete home study and online contractor’s license programs to help you pass your California contractors license exam. CSLS offers licensing classes for all types of contractor licenses, including General Engineering Contractor, General Building Contractor, Specialty Contractor, Insulation and Acoustical Contractor, Framing and Rough Carpentry Contractor, Cabinet, Millwork and Finish Carpentry Contractor, Concrete Contractor, Drywall Contractor, Electrical Contractor, Elevator Contractor, Landscaping Contractor, Warm-Air Heating, Ventilating and Air-Conditioning Contractor, and many others. For a complete list of contractor licenses, visit and tuned for more informative posts.