How To Protect Your Small Business Against Fraud - ToOLOwl
Wednesday , June 16 2021

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How To Protect Your Small Business Against Fraud

The year 2020 has been difficult for all types of businesses, small and large. However, small and medium-sized businesses are ready to bounce back and acquire their old position once again. As per the Capital One Small Business Confidence Survey, most of 2020 was all about fighting the global pandemic and hope for an economic relief, the businesses needed to make sure that they are safe from the additional risks and frauds that might hamper their growth again in the year 2021.

Industry experts have said the frauds are likely to increase in the coming year as most of the businesses have been badly hurt from the economic and market crisis all over the globe.
These frauds can be fake messages which are claiming your small business trademarks as they are expiring. Even the customers start requesting the bogus chargebacks from the credit card companies. It can also be employees who start committing internal fraud.

These frauds make a small business its easy target for the criminals as they believe that the small business lack a set of preventive policies in the place to identify and fight back against fraud. There are three common types of frauds that are faced by small and medium-sized businesses listed below:

Cyber Fraud

Any business that is operating online needs to have a strong cybersecurity plan in place. As per the reports from the Federal Communications Commission (FCC), digital information theft have become the most commonly reported fraud in the present times. FCC shares some recommendations and tips for your cybersecurity policy:

  • Establish basic and strong security procedures. Train your employees and insist them to use strong passwords, and use precautions while they are protecting customer data and other crucial business information.
  • All the devices must be updated with the latest security software applications, web browsers, and operating systems. The best approach is to use firewalls and antivirus software applications.
  • As more and more employees are now working remotely, it is wise to develop a mobile devise action plan to encrypt all the valuable data and information. The business must ensure that every employee must have a user account so that any fraudulent activity can be traced.
  • It is recommended to take a back up of the important business data on the cloud.
  • The business Wi-Fi network must be secured with the Service Set Identifier (SSID) and password protection.
  • The business owners must closely work with the banks or the credit card processors to protect the payment and banking information.

Employee Embezzlement

One of the costliest risks is employee fraud, especially for small and medium-sized businesses. Some of the tips to avoid these frauds include:

  • Use the digital medium at the maximum. It is highly recommended to go paperless as paper-based documentation is highly risky. It is very easy for the accountant to access any information as it is handy. Also, it is easy for him or her to hand to a person with the intention of fraud.
  • Use digital solutions can be used to implement fraud preventive accounting controls and authorization limitations.
  • It is recommended to automate the work processes by digitalizing the reminders and creating an adult trial.
  • By increasing the frequency of the internal audits, the businesses can secure their crucial data and information.

Payment and Banking

Banking and payment frauds can be different types. These can be unauthorized transactions, bounced checks, stolen or lost stock, and fake requests to make returns and refu

The year 2020 has been difficult for all types of businesses, small and large. However, small and medium-sized businesses are ready to bounce back and acquire their old position once again. As per the Capital One Small Business Confidence Survey, most of 2020 was all about fighting the global pandemic and hope for an economic relief, the businesses needed to make sure that they are safe from the additional risks and frauds that might hamper their growth again in the year 2021.

Industry experts have said the frauds are likely to increase in the coming year as most of the businesses have been badly hurt from the economic and market crisis all over the globe.
These frauds can be fake messages which are claiming your small business trademarks as they are expiring. Even the customers start requesting the bogus chargebacks from the credit card companies. It can also be employees who start committing internal fraud.

These frauds make a small business its easy target for the criminals as they believe that the small business lack a set of preventive policies in the place to identify and fight back against fraud. There are three common types of frauds that are faced by small and medium-sized businesses listed below:

Cyber Fraud

Any business that is operating online needs to have a strong cybersecurity plan in place. As per the reports from the Federal Communications Commission (FCC), digital information theft have become the most commonly reported fraud in the present times. FCC shares some recommendations and tips for your cybersecurity policy:

  • Establish basic and strong security procedures. Train your employees and insist them to use strong passwords, and use precautions while they are protecting customer data and other crucial business information.
  • All the devices must be updated with the latest security software applications, web browsers, and operating systems. The best approach is to use firewalls and antivirus software applications.
  • As more and more employees are now working remotely, it is wise to develop a mobile devise action plan to encrypt all the valuable data and information. The business must ensure that every employee must have a user account so that any fraudulent activity can be traced.
  • It is recommended to take a back up of the important business data on the cloud.
  • The business Wi-Fi network must be secured with the Service Set Identifier (SSID) and password protection.
  • The business owners must closely work with the banks or the credit card processors to protect the payment and banking information.
Employee Embezzlement

One of the costliest risks is employee fraud, especially for small and medium-sized businesses. Some of the tips to avoid these frauds include:

  • Use the digital medium at the maximum. It is highly recommended to go paperless as paper-based documentation is highly risky. It is very easy for the accountant to access any information as it is handy. Also, it is easy for him or her to hand to a person with the intention of fraud.
  • Use digital solutions can be used to implement fraud preventive accounting controls and authorization limitations.
  • It is recommended to automate the work processes by digitalizing the reminders and creating an adult trial.
  • By increasing the frequency of the internal audits, the businesses can secure their crucial data and information.
Payment and Banking

Banking and payment frauds can be different types. These can be unauthorized transactions, bounced checks, stolen or lost stock, and fake requests to make returns and refunds. Credit card users and credit card merchant account holders are the ones that are targeted by most of the hackers. The attackers steal their credit card numbers and use them to steal money.

It is thus important to prevent banking and payment fraud. The best way to ensure that you are aware of the latest fraud trends. It is also wise to encrypt payment transactions and develop business partnerships with those who provide secure payment processes.

The online bank account of a small business is also a major target for hackers. It is thus advised to limit the number of transactions you make. Also, banking information should also be shared with only a few people. Use digital platforms to develop user-based permissions controlling what the employees can see.

Improve your security over any and every platform so that your business remains secure from any fraud. nds. Credit card users and credit card merchant account holders are the ones that are targeted by most of the hackers. The attackers steal their credit card numbers and use them to steal money.

It is thus important to prevent banking and payment fraud. The best way to ensure that you are aware of the latest fraud trends. It is also wise to encrypt payment transactions and develop business partnerships with those who provide secure payment processes.

The online bank account of a small business is also a major target for hackers. It is thus advised to limit the number of transactions you make. Also, banking information should also be shared with only a few people. Use digital platforms to develop user-based permissions controlling what the employees can see.

Improve your security over any and every platform so that your business remains secure from any fraud.

SourceSmall Biz Trends

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