Protect Your Business From Online Fraud

From managing your projects with a small staff to juggling it all on your own through your self-employed business, online fraud prevention may not be at the top of your to-do list. Many small business owners think that they’re safe because scammers would rather pursue larger companies for bigger profits—but they’re wrong.

Top types of small business fraud

1. Account takeover fraud. This is when a scammer gets access to and uses your existing credit account information. This type of fraud is simple to catch, as the fraudulent transactions will appear on your credit card bill, account statements, or online banking account.
2. True name fraud. Small businesses that are set up in the owner’s name or managed under the owner’s personal accounts are particularly susceptible to true name fraud. This happens when scammers get your social security number or other personal information to open new accounts in your name. Victims of this type of fraud may not become aware of it for months or even years because the statements and bills are delivered to the thief, not you.

The most common ways scammers try to trick their victims into disclosing their personal or financial information is through spoofing and phishing. Spoofing involves the creation of counterfeit websites that imitate legitimate websites of financial or e-commerce companies. Phishing is when scammers send fraudulent emails to drive victims to the spoofed websites of companies they trust. Once there, the spoofed website instructs them to enter confidential data, such as their social security number, account numbers, and passwords that the scammers will then use to access their victims’ accounts through legitimate company websites.

Tips for safeguarding your business

1. Install spam filters and pop-up blockers. Cutting down on the amount of unsolicited traffic that comes into your office through the Internet is a good way to limit your exposure to fraud.
2. Use a financial services provider that safeguards your accounts. Most financial providers say that they’re committed to account security—but only a few are working to keep up with the latest trends in fraud prevention. Two-way, two-factor authentication is the latest in online security technology, through which your financial institution first authenticates you by identifying your user name and password; identifies you through your registered computer, and issues you challenge questions if you’re logging in through an unregistered computer. Once you’ve logged onto the site, you’ll know that it’s not spoofed by looking for the unique welcome phrase and unique security image that you selected when you registered for online banking.
3. Educate yourself and your staff. If you’re working with a bank or credit union that offers the latest in online security (like the two-way, two-factor authentication system mentioned above), chances are that it will also provide a wealth of information about online security as well. Take a look at your financial institution’s website for educational articles that you can share with your staff to ensure your company doesn’t fall prey to scammers.