Fraud is one of those terms no-one likes to hear in business, but the reality is it exists, and it’s your job to put the correct measures in place to protect your business. However, knowing where to start, when it comes to safeguarding your business, can be the hardest part. The good news is, awareness is the first step, writes Grant Bissett founder of Pin Payments.
Familiarising yourself with the different types of business fraud, will help you re-examine whether your existing practices need improvement or not. Regardless, when it comes to fraud, there are certain types you should be aware of when protecting your business.
Three types of fraud to watch out for
1. Account Take-Over Fraud
From a financial perspective, one of the most significant risks a company can face is ‘Account Take-Over Fraud’. This type of fraud exists when someone gains access to a business account, sometimes through a compromised password, and then gains access to multiple business tools and applications.
An even higher risk exists if a business has used the same password for multiple accounts or platforms, thus enabling easy access for fraud. The difficulty with Account Take-Over Fraud is it’s not always clear that an account has been hacked and hackers can set up automatic rules on an inbox to filter out anything which may alert you to what they’re doing. From that point, hackers may trigger password resets to other accounts or access your business or personal bank accounts.
2. Money Forwarding Fraud
‘Money Forwarding Fraud’ is another type which has gained significant traction since COVID-19, and can leave your business financially liable for a hacker’s actions. Money Forwarding Fraud occurs when a scammer overpays for a transaction, then asks you to send some or all of it on to someone else. If you do so, and the transaction later turns out to be fake, you’ll be left with a chargeback for the full amount of the original transaction and additional chargeback fees . So when in doubt, in regards to the legitimacy of a financial transaction, don’t forward money.
3. Credit Card Fraud
Lastly, credit card fraud happens when a stolen credit card is used to pay for transactions. This is one of the most common run-of-mill scams and due to the uptake in online shopping since the pandemic, many have encountered it. Despite this, there are also more security measures in place now than ever before, to combat credit card fraud from as easily or readily happening.
As a business owner, it’s important to remember that fraud is a commercial enterprise for some people and, as such, the technology and practices they use are constantly improved upon and updated. Given this, as a business, it’s paramount you stay up-to-date with the latest tools and publications, which will help you stay in the know about scams.
How to protect your business
1. Have different passwords across all your business accounts
This may seem like an obvious tip, but many people use the same password or the same variation of a password across multiple accounts. In fact, according to a study by Google, as many as 65% of people reuse the same password for multiple or all accounts. Despite how difficult it can be to remember passwords for all your business apps and accounts, doing so could save you thousands, not to mention the emotional stress of being hacked. Password managers, like 1Password or LastPass, can be a great solution to this problem.
2. Ensure you have two-factor verification enabled on all your accounts
Almost all financial or business tools now utilise two-factor verification, two forms of verifying your identity as the user, as a security protocol for accounts. This usually exists in the form of a verification number provided via email, another platform or an authenticator app, which only you have access to. Two-factor verification will ensure your account is protected in situations where your email account is compromised.
3. Watch out for any suspicious activity across all your business accounts
As a business owner, it’s important to carefully monitor all activity, transactions and interactions. If you have an eCommerce store, keep an eye on the purchases which take place late at night, at a higher than usual transaction cost, at a different delivery address to the listed address or include a high number of product items. This type of activity usually indicates fraud. Cross-check all transactions with a form of ID and ensure that all of the details including name, address and credit card are correct. This is where using easy card authentication (ECA) is useful.
4. Keep on top of your security updates
At the end of the day, the most important thing you can do to protect your business is ensure all of your security protocols, processes and software is up-to-date. Make sure you regularly run software updates so you are utilising the latest technology and consider regularly updating or changing your passwords. Though this might seem extreme, these measures are in place to protect your data, financial security and business. You can also stay up-to-date with the latest online scams through the Australian Government’s Australian Competition and Consumer Commission called Scam Watch.
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