3 Ways Businesses Need to Be Savvier than Fraudsters

Scams and fraud are one of the most common ways businesses lose their hard-earned money. As a matter of fact, the Association of Certified Fraud Examiners show that businesses, on average, lose about 5% of their annual revenue to fraud. That's almost a $300,000 median loss for most small businesses.

It seems that scam artists and fraudsters are coming up with more and more complex ways to trick businesses into shelling out cash. From imposter scams to phishing, there are a lot of ways they conspire to take your money. So how are you supposed to protect yourself and your business?

Protecting yourself includes educating yourself and your employees on how to spot a scam or fraud attempt. Not to mention, Id verification and cyber security are key to protecting your digital assets. In our guide, we'll share how to do this and more.

1. Knowing What to Look For

Knowledge is power, especially when dealing with scammers and fraudsters. They are often well-informed and have done extensive research in an attempt to sound official or look authentic. Knowing the most common scam and fraud schemes can save you a lot of headaches when you encounter one.

Imposter scams are one of the most popular scams there are. They may pretend to be from a government office, such as the IRS, calling to tell you that you have fines or fees and are seeking immediate payment. It's important to remember that government offices will not call you and demand payment over the phone.

Government offices will always send a letter explaining why you're receiving the letter and how to contact them. If you receive a letter that seems off, be sure to contact the official office the letter claims to be from and verify its authenticity.

Another common scam against businesses is unordered merchandise. Someone may call to offer a free catalog or try to confirm an address posing as one of your suppliers. Then you will receive a shipment of unordered office supplies. These supplies will often be cheap or low quality. The scammers will then wait long enough for you to use or dispose of the merchandise to demand payment.

2. Tightening Your Cyber Security

In today's society, businesses rely heavily on technology and digital products to help manage and scale business. If your digital products and information aren't properly protected, they can leave you vulnerable to cyber-attacks and information breaches. Allowing fraudsters to obtain information such as bank account information, your customer's information, and more.

This is often done by stealing your employee's login information or corporate data through phishing and malware. They often do this by sending out emails that may look like automated emails, like routine notifications to update a password.

One of the best ways to combat this is to require multiple authentication methods, such as online ID verification. These services can check to ensure that the person trying to access the account is, in fact, you or your employee. This service often asks for an ID and then does a live check to ensure the person holding the ID is the same as the photo on the ID. It's also important to train your employees on proper cyber security as well. This includes setting and enforcing email procedures like what is able to be shared and what isn't through email or online. Hold regular meetings to discuss cyber security and proper procedures as well as discuss new scams as they become prevalent.

3. Secure Your Information

Businesses have massive amounts of sensitive information, and it's important to keep this information secure. Otherwise, scammers and fraudsters can use that information to defraud you or your customers.

Be sure to keep any customer files secure with encrypted data or paper files locked in a filing cabinet. When disposing of paper files, be sure to block any sensitive information like addresses, invoice numbers, bank account information, etc. You can do this using a roller stamp specifically made for sensitive information. Once you've blocked out all of the important information, it's a good idea to go a step further and shred the documents as well.

Be sure not to save any of your sensitive information in services like cloud storage or digital wallets that are easily breached. Private servers with a strong IT department are one of the most secure ways to store this kind of information.

Stay Savvy

Engaging services like online id verification, reputable IT techs, and your own policy and procedures are the first line of defense against scammers and fraudsters from getting you and your customer's hard-earned money. Keep these tips in mind when dealing with any specious emails or phone calls and when deciding how to store information. We have all the information you need to run your business securely and profitably. Be sure to check out the rest of our blog to scale and protect your business.