Mountain States Tent & Awning has been hit by phone scammers three times in just the past year. For Mary Lee Wray, office manager of the Loveland, Colo.-based company, it began innocently enough. A caller using the TTY system, which allows hearing- and speech-disabled people send text messages over traditional phone lines, asked for six flagpoles -- the most expensive ones she carries -- and paid by credit card.

The caller requested that Wray ship the goods to another company, along with a check for shipping costs, which the caller said he would pay for in advance.

When Wray called the flagpole supplier, the company told her they had received an internal memo about a scam that made use of the TTY system. The first name on the memo matched the caller's name on the TTY call Wray had received. She immediately ran a check on the credit card, which turned out to be stolen from a woman in Texas.

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Since then she has received two more calls through the TTY system. Both calls were made by scammers. Ever since, Wray says, "I have learned to be alert the moment a TTY call comes. My first instinct is to check the credit card used for payment."

With less money to devote to prevention, small businesses routinely find themselves on the receiving end of fraud. Over the years, business owners and local business groups have become better at spotting red flags, but the problem remains because scam artists have also adopted new methods. Similarly, while technology has made the fight against fraud easier in some cases, it's also opened up new opportunities for criminals.

The tactics and tools may change, but experts say the fundamental component of an effective scam remains constant.

"Scam artists create a perception of credibility and then capitalize on it," says Giovanni Coratolo, director of small-business policy at the U.S. Chamber of Commerce. During his tenure, Coratolo says he has seen everything from the pre-Internet phonebook scams (where scammers ask businesses to pay for ads in the directories that are distributed to a very small number of people) to charity scams (small businesses are asked to donate to the local community).

In the past year, two scams in particular -- TTY scams and overpayment scams -- have become more prevalent, according to the Better Business Bureau.

How do they work? With the TTY system, a hearing- or speech-impaired customer types messages to an operator, who then reads them aloud to the call's recipient. Operators are generally not allowed to disclose the location from where the call originates. Such anonymity has made this a popular route for scam artists to target small businesses, with many originating overseas.

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In overpayment scams, businesses are overpaid through stolen checks or credit cards, and then asked to return the difference when the merchandise is shipped. Often, the businesses are asked to send the goods to a third party, which will in turn send them to the scammers -- adding another layer.

Sellers take longer to realize what's unfolding, by which time it becomes nearly impossible to trace the scammers. In several instances, businesses have been targeted by both TTY and overpayment scams in the same transaction, according to the Better Business Bureau.

Simply raising awareness of common scams can be effective in combating them, according to Sheila Adkins, director public affairs of the Council of Better Business Bureaus.

"There is always some phone call that will come and people won't be prepared," she says. "The more education that is put out the better. It helps businesses become better prepared."

Another scam gaining in popularity involves business valuation. Small businesses will receive faxes from organizations that say they want to value their businesses in order to get them to sell. Business owners are tempted by the prospect of a big payday, so they spend several thousand dollars in fees for a bogus valuation, only to never hear from them again. The amounts typically range between $5,000 and $10,000.

While criminals are continually adapting and developing new scams, several older scams are still effective. Bogus-invoice and office-supply scams have been around for many years, but are still common. For example, a business will receive letters asking it to renew subscriptions to a service, such as Internet service.

The word "renewal" implies that the business is already subscribing, and accounting departments often end up sending the payment without bothering to check.

The proverbial "get rich quick" schemes are also still common in a variety of forms -- work-from-home programs, seminars offering entrepreneurial tips, and others. Such scams are still effective, experts say, because barriers to entry are kept low. Anyone paying $200 can attend an event, but once there, participants are coaxed into buying books, DVDs and other materials of low quality at ridiculously high prices.

In recent years, phishing and other Internet scams have attracted a lot of publicity and business owners are more alert to Internet schemes asking them to part with their money.

Small businesses have also become savvy at building internal controls with the company. Adkins stresses that businesses must have strict controls in the accounts department. All invoice processing should be centralized and one person must be made ultimately responsible for making expenditures and payments.

Solid accounting practices and can help prevent fraud, even if your company doesn't necessarily draft a formal anti-fraud policy, according to Bob Elfanbaum, CEO of Asynchrony Solutions based in St. Louis. Elfanbaum's company conducts monthly reconciliation of accounts, as well as background checks on all employees. "Fortunately, we haven't been the target of any scam so far," he says. "But we are always alert to the possibility."

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