Three Fraud Prevention Tips for Protecting Your Small Business

Small businesses are a frequent target for fraud. From cybersecurity issues, impersonation scams, and other questionable practices, small businesses face many types of fraud. Here are three tips you can incorporate into your business practices to prevent fraud losses.

1. Protect your bank accounts

There are numerous ways to protect your bank accounts from fraud.

• Monitor your online bank accounts frequently. Review your accounts daily. If you make it part of your routine, you’ll pick up on fraudulent activity much faster.
• Separate Business and Personal accounts. If you haven't created separate bank and credit card accounts for your personal life and business, do so now. If hackers get their hands on one account, they won't have access to the other, and vice versa.
• Enable Card Controls. If you’re going to give credit or debit cards to employees, ensure that the card provider has suitable fraud protections in place, such as automatic alerts if an employee spends over a certain amount.
• Protect your banking information. Handle bills online so there are as few paper bills lying around an office as possible. The more paperwork there is, the more likely that a bill with banking information could fall into the wrong hands. This is also true with your checks, be sure to secure them in a safe, locked location.

2. Cybersecurity and Tech-Related Scams

If you get an unexpected text message or email, don’t click any links, open attachments, or download files. That’s how scammers load malware onto your network or try to convince you to send money or share sensitive information.

Additionally, use unique, strong passwords that are difficult to decipher for each online account you have established. Enable multi-factor authentication when available. Most importantly, do not share your password with anyone.

Learn more about protecting your small business or non-profit organization from cyber scammers and hackers: check out Cybersecurity for Small Business | Federal Trade Commission.

3. Be aware of Scammers’ Tactics

There are many different scams and new ones are always being created. They all share common tactics to get sensitive business information or even your hard-earned money. Stay alert to these red flags:

• Scammers pretend to be someone you trust. They impersonate a company or government agency you know to get you to pay. This can originate from a text, email, or a phone call. But it’s a scam.
• Scammers create a sense of urgency, intimidation, and fear. They want you to act before you have a chance to check out their claims. Don’t let anyone rush you to pay or to give sensitive business information.
• Scammers ask you to pay in specific ways. They often demand payment through wire transfers, cryptocurrency, or gift cards. Don’t pay anyone who demands payment this way. It’s a scam.

Learn more about small business scams: check out Scams and Your Small Business: A Guide for Business | Federal Trade Commission