It’s the season of goodwill but unfortunately not everyone has good intentions at this time of year or any other time for that matter. Scammers are everywhere, taking advantage of individuals and businesses. We often hear about people being duped into parting with their cash by fraudsters on dating sites but not much is said about business hijacks which have surprisingly similar characteristics and are hardly reported.
Better Business at Hand Consultant Maria Pombo is noticing a recurrence in “lonely heart” businesses hijacks, particularly for family run businesses, which is leading to shareholder and Directors disputes.
These are very clever scams. We want to help you understand what to look out for and what to do if you have concerns that your business is being targeted or worst case scenario is the victim of a hijack. At Better Business at Hand we specialise in providing advice for small businesses and are here to help when a problem or a crisis strikes.
What is a business hijack?
A business takeover is when one company successfully assumes control of another business or acquires it, this is a completely transparent process and above board. A takeover can be achieved through buying a major share in the target business.
In a hijack the business is taken over as the result of the owner being duped and often without the agreement of any shareholders. Although deemed to be consensual, the business owner is tricked into giving up their business. The owner and shareholders often make considerable losses as a result of a business hijack.
Want to know if a situation constitutes a business hijack? Maria Pombo can talk you through what to look for, book an appointment with Maria.
How does a business hijack happen?
In online dating scams vulnerable and often lonely people are targeted by fraudsters using fake profiles. A very similar approach is taken by fraudsters who target businesses. It’s easier than you might think to fall for this type of scam as, on the face of it, the predator appears to be genuine and will go to great lengths to look bona fide but they will have a hidden agenda.
Unscrupulous predators prey on unhappy lonely business owners. We’ve all had one hell of a time recently with many people more fragile than they might be in more usual times. Running a business can be lonely and deceitful people take advantage of this. Hence the term “lonely heart” business scams.
A business can be taken over by a new business contact/boyfriend/girlfriend/friend/lover/ – in most cases it will be by someone no one knew six months ago, a newcomer on the scene.
You might meet someone at an online networking meeting or face-to-face in a business context. They offer what looks like helpful advice, in effect they are grooming the business owner to encourage dependency on them emotionally and on their advice. Perhaps the owner sees affection/love/care even intimacy towards them, and small wins in the business, which makes them trust the predator who gradually infiltrates the business.
The predator woos the business owner over a short period of time and then forces a takeover. Caboom – the s**t hits the fan!
A business hijack causes major problems for the former business owner and any shareholders. Once the predator has taken over the business, they might gaslight the former owner making it impossible to get any answers.
In the same way that people often feel very embarrassed about being duped by a dating scam, business owners do not come forward about being hijacked and seldom report what has happened. This means very little resolution and that awareness about the issue is low in the wider business community.
There is the added complication that unfortunately the takeover can be considered to be consensual even though emotional trickery has been involved. The situation is extremely stressful for the injured parties.
But it’s not all doom and gloom, through following small business advice you can help to prevent a business hijack.
Small business advice: How to stay safe
One of the best pieces of small business advice we can give at Better Business at Hand is to stay aware. Scammers operate online and attend business groups and even hold “make quick money in your business” courses to groom their prey. If you meet anyone, and before you give your tender heart (and business) willingly, do your due diligence research. Check their online profiles, including public records starting with Companies House searches, and check that any business memberships, testimonials etc. are genuine.
If someone comes into your personal life be guarded about a trail of broken hearts, business disasters and financial problems. Other red flags include no evidence of friends or family and the person offering no information about their background in both their professional and personal lives. Of course, people can have perfectly genuine reasons for things. But keep an eye out for any alarm bells especially if the person is trying to become deeply involved in your business.
As we mentioned earlier, business hijackers often target the lonely unhappy owner (even if married). If you’re experiencing loneliness, reach out to close trusted friends and family. As a business owner, develop a strong network of business contacts you can trust. You could do this through a local chamber of commerce or official networking organisation.
We’re not advocating that you live your life not trusting people but if something seems too good to be true it is probably too good to be true so do check it out.
Another practical way to protect yourself, your family and/or business partners is to have a well drafted Shareholders Agreement and Directors and Officers contracts. Maria Pombo at Better Business at Hand can advise you on how to do this, book an appointment with Maria.
Where to go for help
If you’ve been scammed, defrauded or experienced cyber crime contact Action Fraud, the UK’s national reporting centre for fraud and cyber crime.
Visit the Action Fraud website to find out more and make a report https://www.actionfraud.police.uk/
For a confidential no judgemental chat without embarrassment, book an appointment with Maria Pombo.
On a positive note…
This can all sound like scary stuff but just remember the overwhelming majority of people are not out to scam you.
The world of business is built on trust. Our clients and customers trust us to deliver what we promise and as business owners we trust our customers, suppliers and other partners. This trust is not misplaced but pays dividends for all parties.
It’s fantastic running a small business but you just need to keep your guard up to protect yourself and your business.
If you are experiencing loneliness it’s worth checking out why you are in that state of mind, follow this useful link for more information on the subject https://www.mind.org.uk/information-support/tips-for-everyday-living/loneliness/about-loneliness/
For the most part as a business owner you will experience more ups than downs.
The highs are incredible and make everything worthwhile!
Wishing you and your family all the best for the festive season and the new year.
The Better Business at Hand team.