Small-business fraud is becoming all too common, and the impact can wreak havoc on a business’s bottom line as well as its reputation. That’s why we want to remind you that California Bank & Trust is in your corner and dedicated to serving as a resource to help protect your business from fraud and scams. In
this post, we’ll go over some ways you can protect your business and avoid
fraud.
Five ways you can spot and protect your small business from fraud
1. Be vigilant for malicious email attachments
Scammers will often embed malware or ransomware in an email
attachment. Opening the attachment activates the malware and, once activated, it can transmit usernames and passwords. Ransomware is even worse because it can block you from accessing your files until you pay a ransom. Some ransomware programs will even delete your files entirely if the ransom is not paid before a predetermined deadline is met.
What you can do
Never click on links or files embedded in emails, especially from unknown senders. Make sure employees are made aware of this policy. It’s always better to type the URL in manually from an authentic bank document or the back of your bank-issued card.
Perform system backups regularly. You can mitigate the worst aspects of a ransomware attack by performing regularly scheduled backups that include your entire system. Make sure to make multiple copies and store them securely offsite. That way, if you are victimized by a ransomware attack, you are only at risk for losing data added to your system since your last backup.
2. Watch out for other types of business email compromise (BEC)
There are many other ways fraudsters may try to compromise your business through email scams. Some of the more common tactics include CEO impersonation, account compromise, submitting false invoices, attorney impersonation, and W-2 or employee data theft.
What you can do
In addition to firewalls, the best defense against a BEC attack is
to bring a heightened sense of awareness whenever you or your employees interact with email. Here are some additional best practices you can employ:
- Examine
email details closely. Does the email address match? - Validate the payment instructions with your account details on file.
- Personally call and validate the request.
3. Verify invoices before committing to paying them
Fraudsters will submit fake invoices in the hopes that an overburdened accounts payable system will pay them before they can be verified.
What you can do
Implement policies requiring employees to check and verify the validity of every invoice prior to payment. Also, unless prearranged with a known and vetted vendor, never pay an invoice with a wire transfer,
cryptocurrency or gift cards.
4. Be careful which employees have access to your bank accounts
Unfortunately, a lot of business fraud originates with employees.
Giving an employee unchecked access to your financial data increases the risk of internal fraud. Without independent oversight, they can make unauthorized withdrawals or transfers of your business’s funds.
What you can do
Spreading your internal accounting among several employees reduces the opportunities for abuse through collective accountability. Also, employing an independent accountant to audit your books on a regular basis provides external oversight and is a strong deterrent to internal fraud.
5. Protect your business’s identity
Identity thieves don’t just target individuals. Your business’s identity can be stolen too. Once they get in, identity thieves can wreak havoc on your finances and your reputation.
What you can do
If you discover that your identity has been compromised, it’s important to act quickly and methodically.
- Contact the Federal Trade Commission (FTC) as well as your local police department. The FTC coordinates enforcement eff orts with the FBI. Filing a report with yourlocal police can be helpful when trying to have unauthorized transactions
removed or reversed. - Contact the three major credit bureaus (Equifax, Experian, and TransUnion) and request a fraud alert be placed on your file. This will prevent further accounts from being opened in your name for 90 days.
- Order a copy of your credit reports. Review your credit reports for any new or unauthorized accounts or activity.
- Notify credit bureaus—and the creditors affected—of any fraudulent activity.
If you feel that you have been the victim of business fraud, California Bank & Trust is here to help. Don’t hesitate to
call us at 1-800-400-6080 or visit your local branch.