Business Fraud Protection

Business Fraud Protection

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Billions of dollars are lost to business fraud each year, with smaller businesses tending to suffer disproportionately larger losses.

Many of the aforementioned security best practices can also be applied to your business to reduce the risk of fraud. It also is suggested that your business conduct a risk assessment and identify controls and safeguards that can be implemented to minimize fraud, which may include the protections listed below:

Establish Internal Controls

  • Limit electronic access to financial information or sensitive documents.
  • Develop procedures that control how financial transactions are made and implement review and authorization procedures.
  • Utilize dual control and dual approval for any functions that move money out of an account, such as ACH or wires.
  •  Review and reconcile accounts daily.

Secure and Maintain Computer Systems

  • Maintain appropriate network user access security if computers are networked and educate all personnel on good cyber security practices.
  • Ensure firewalls, anti-virus software and spyware prevention software is installed and kept up-to date on all computers. Consider installation of a firewall and install all computer operating system patches and updates.
  • Maintain the physical security of computers and limit access to those computers that are used for sensitive functions.
  • Limit Internet access on business computers to business requirements. Consider using a dedicated computer for all of your financial transactions and avoid the use of public computers.
  • Do not download or install software from unknown third parties or open e-mail or e-mail attachments from an unknown source.
  • If you suspect malware is lurking on your computer, stop banking and other online activities that involve user names, passwords, and other sensitive information. Malware could be sending your personal information to identity thieves. You may want to call in professional help to diagnose and correct any problems.

Supervise and Monitor Financial Transactions

  • Adequately supervise all employees who take part in business finances.
  • Continually review wires, transfers, payroll, and business checks or use an automated monitoring system.
  • Consider using bank "positive pay" arrangements and/or "ACH debit block" service to minimize fraud.
  • Personally review your bank statements and restrict access to financial documents, checks, credit cards, and cash.
  • Carefully review your business' bank account(s) for fraudulent activity. If anything suspicious is detected, immediately call your bank representative.

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Other Fraud Related Sources

Federal Trade Commission
Business guide on security practices by the FTC.

Federal Trade Commission
Scams and Your Small Business: A Guide for Business

US Small Business Administration
Protect yourself from scams and fraud