In today’s world, technology has made it easy to conduct business around the world. However, it has also made it much easier for criminals to commit fraud against businesses. With small businesses losing $150,000 annually due to fraud, the problem is getting bigger each year.
As a result, more businesses are turning their attention to finding ways to prevent fraud. Whether it’s credit card fraud by a customer or theft by an employee, there are many ways businesses can reduce or eliminate fraud being committed against them.
Separate Business and Personal Accounts
For many small businesses, one of the most common and biggest mistakes they make is failing to separate their personal and business bank accounts. By failing to do so, it becomes much harder to track both personal and business expenses, making it easier for criminals to commit fraud.
To keep this from happening, keep separate accounts and carefully examine all credit card and bank statements each month. If unusual activity starts to show itself, contact the bank or credit card company immediately.
Employee Background Checks
While it’s natural to want to trust employees, the sad truth is from time to time an employee will engage in fraudulent activity. To keep this to a minimum, all employers should conduct extensive background checks on their employees.
This is especially important for employees who will be handling cash, dealing in high-value merchandise, or having access to sensitive financial and personal information.
Be Smart with Passwords
As with personal computer accounts, employers should become much smarter when it comes to their passwords. One of the biggest mistakes made in many small businesses is giving too many employees access to passwords, which often leads to fraudulent actions.
To make their IT structure much safer, businesses should give access to sensitive data only to those employees who truly need it on a regular basis. In addition, all employees should change their passwords every 60-90 days, make the passwords as complex as possible by using combinations of numbers, letters, and symbols, and have different passwords for each online account they have on the job.
Malware and Spyware
Seen by many cybersecurity experts as perhaps the biggest threat to businesses everywhere, malware and spyware can literally hold a business and its computers hostage. Often implanted in a suspicious email, it goes to work once the email is opened by an unsuspecting employee. In extreme cases, it can literally lock a computer and hold its files for ransom, forcing the employer to pay a criminal in order to regain access to their information.
To guard against this, network security experts highly recommend all computers at a business have a firewall, along with anti-virus, malware, and spyware detection software installed on them to prevent fraudulent activity from happening. With more and more criminals turning to a life of cybercrime, these safeguards are more important than ever for small businesses.
Resources and Tips
While it is almost inevitable that most small businesses will at some point be the victim of fraudulent activity, the good news is that there are a number of resources and tips at their disposal. For starters, they can purchase insurance policies to protect against losses from crime or fraud.
In addition, they can work with banks and credit card companies to become more aware of how to keep their accounts from being compromised. But perhaps most important is to hold regular training sessions for employees, making them aware of potential problems and any preventive measures currently available. By doing this and always being proactive, chances are fraudulent activity will be greatly reduced or eliminated.
Photo: Rob Pongsajapan / CC 2.0