According to data released by the government, 1.4 million new companies were registered in Brazil in the first four months of 2024 alone. This number represents a 26.5% increase compared to the last four months of 2023.
But are all these new businesses truly protected? That’s not what the São Paulo State Finance and Planning Department (Sefaz-SP) shows in its latest actions. On the contrary: in December 2024, the department suspended over two thousand companies suspected of involvement in digital scams related to IPVA payments.
However, there is a key point essential to understanding this issue: these companies were using names and elements similar to those of public agencies and highly reputable companies in the market.
In other words, they were not only deceiving consumers but also compromising the reputation of legitimate brands by associating their actions with trusted names.
How do frauds impact legitimate companies?
As we mentioned earlier, when fraudsters use visual elements or names similar to those of brands or public agencies, the damage is not limited to the deceived consumers.
This is because legitimate companies also suffer the consequences of this type of scam, facing challenges such as:
Loss of consumer trust
Consumers, when experiencing negative situations due to scams, often cannot distinguish between the real brand and the fraud. As a result, this can lead to distrust toward the legitimate company, even if it has no direct involvement in the incident.
In other words, your business will constantly pay the price for the actions of third parties.
Drop in traffic and sales
Another negative aspect of this type of fraud is the possibility of organic traffic being redirected to fake websites or channels, which takes away their chance of reaching your actual company.
This not only decreases sales but also compromises the impact of marketing campaigns, affecting the brand’s financial performance.
Increase in legal and operational costs
All companies whose names and brand elements have been used by scammers undoubtedly invested a significant portion of their time and resources in repairing the damage caused.
As a result, it is not surprising to think that this restitution, besides increasing communication expenses to clarify to the public that there is no involvement with the scams, also raises legal and operational costs due to potential litigation.
In other words, investing in digital protection is not just strategic—it is essential. Especially for brands that want to safeguard their credibility and results, showing potential fraudsters a stance of vigilance and commitment to digital security.
Want to learn more about what shield marketing is and how it can prevent cases like this from happening to your brand? Keep following the Branddi blog!
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