How Online Business Owners Can Protect Themselves From Fraud in 2026

Partway through 2025, TransUnion data revealed that fraud had cost companies worldwide an average of 8% of their revenue. For major players, that may not break the bank. However, small business owners can face irreparable harm if they are defrauded. This article details the most common online scams that target entrepreneurs and what they should do to avoid them.

The Most Common Online Business Scams and How Operators Can Protect Themselves

Business Wire has reported that in 2023, there was a 71% increase in corporations being targeted by fraud attempts. In response to that trend, the Marketing Director of the VPN company, AstrillVPN, Arqam Zafar, compiled a list of the most common scams that online business owners need to be aware of. He also wrote guidance on how to react if targeted or affected by one of those tricks, and all that information was shared with Men's Journal for this article.

Phishing Scams:

Phishing scams are designed to trick people into sharing sensitive information, including passwords, credit card details, and more. They work by sending fake texts or emails that look real to the intended victim. Instead, interacting with the fake messages opens the receiver up to data theft, financial losses, and being locked out of accounts. These fake messages can be sent to organizations or people and can result in major financial and data losses. Zafar gives business owners the following advice to ensure they and their employees avoid these ploys.

"To spot phishing scams, it’s important that sellers educate themselves on phishing red flags and regularly train their employees to spot them. These can include unexpected requests for personal information, spelling and grammar errors, unknown or suspicious senders, and a sense of threat or urgency in the correspondence."

Zafar continued, "Recipients should avoid clicking any unfamiliar websites and downloading attachments they don’t trust. There are other measures that businesses and sellers can implement to reduce the risk of being hit by phishing scams, such as advanced email filtering tools and thorough assessment of third-party communication. It’s also a good idea to limit access to any sensitive data through multi-factor authentication and to always keep digital systems and software up to date."

Chargeback Fraud:

Sometimes referred to as friendly fraud, chargeback fraud occurs when a customer purchases a product and then tries to get their money back from their credit card company. This is usually accomplished by them falsely claiming non-delivery. These scams can result in the seller losing both the product and the payment. Zafar offers the following guidance for business owners wanting to limit their exposure to this common scheme.

"Good communication is key to preventing friendly fraud. It’s important that online businesses put merchant names and transaction details in banking apps to avoid customer confusion and that email confirmations are sent promptly after purchases are made. Sellers should enable package tracking and delivery updates to ensure that consumers receive their goods. Internet vendors should enforce good customer service and inform recipients of delays. As well as this, it’s ideal to enact two-factor authentication for payments and verify any suspicious-looking purchases (e.g. large orders) before shipping."

Return Fraud:

Return fraud involves customers trying to get a product or money they aren't entitled to through the return process. This can involve deceptive practices like demanding a refund while sending back a different item from the one they were sent, or using a product and then quickly sending it back. To protect themselves from this category of scam, Zafar recommends online business owners develop a strict return policy, communicate it to customers, and adhere to it. He also advises they should always inspect every return before issuing a refund to ensure it is in its "original condition with attached labels" and it doesn't "appear to be used."

Merchant Fraud:

Merchant fraud is when someone sets up what appears to be a legitimate business and then takes customer orders before sending nothing or low-quality items. For entrepreneurs, this can become a problem if a scammer steals their company name and tricks purchasers into thinking they are buying from them. That can open owners up to massive reputational damage and even legal liability if it is determined that they neglected to establish necessary fraud prevention measures.

To protect themselves, Zafar tells owners to ensure that all documents their organizations send include "the company name, logo, and transaction details." He states that "implementing clear terms and conditions, secure payment methods, and multi-factor authentication will also signal to consumers that the business remains trustworthy in the event of merchant fraud." Finally, he recommends that they should make sure to regularly update technical measures that can be used to diminish the chance that they and their customers are targeted by this scam.

Wire Transfer Fraud:

As the name suggests, wire transfer fraud involves bad actors tricking people into sending them money under fraudulent circumstances. Those trying to perpetrate this may pose as trusted figures, including businesses or people the victim is accustomed to dealing with. Whether it is through sending fake invoices or messages designed to evoke an emotional response, the idea is to get the targets to send money in a rush. Once sent, it can be exceedingly difficult to get the funds returned.

Zafar explains that not sharing company information with third parties, maintaining strong passwords, and using two-factor authentication can limit the risk of this kind of scheme. Most importantly, he cautions that owners and employees, "must constantly remind themselves to ignore any unexpected invoices for money." If a business does fall for this common trick, the best thing to do is immediately try to get the bank to stop the transaction. To do so, they should contact the bank by calling or going to a branch while making sure to never take a call from the institution at face value. Even if a call is from the bank's phone number, that could still be the tricksters trying to swindle them.