Business fraud involves the intention or act of misrepresentation, where scammers deceive others about themselves, their actions, or their services to cause gain or loss. Given limited resources and challenging economic conditions, small and medium-sized enterprises (SMEs) often prioritize innovation, growth, and survival over due diligence, internet controls, and risk management. These measures can appear costly, labor-intensive, and bureaucratic.
However, this approach exposes SMEs to significant vulnerability to fraud, with many business owners and managers unaware of the online threat they face. In practice, the minimum level for preventing online fraud can be achieved with relatively little effort and resources.
1. Perform a Security Audit
Undertaking a security audit empowers cybersecurity experts to identify and address weak points. They are reducing the likelihood of cybercriminals executing online fraud schemes, such as ransomware that extorts payment for file access restoration.
While paying a ransom may initially seem like a straightforward and costly solution, it does not always yield the desired outcome. A small survey conducted among businesses that paid ransoms following such attacks revealed that only 45 percent successfully retrieved their data, with an average payment of $4,323 per company.
2. Know Your Customers and Suppliers
You can identify any questionable business requests or transactions by understanding your business partners. Employ a risk-based approach to conduct due diligence, which includes checking the customer or supplier details on file and conducting online searches.
3. Protect Your Communication Channels
If data privacy is important to you, it is your responsibility to create a secure environment for data exchange. This applies to both the security of your network and your message and file transfer tools. There are different services, but you need to check them all personally. To get started, you can study Discord safety and the risks associated with it. You will quickly realize that it is best to complement secure data exchange services with a VPN. One of the VPNs that prioritize security is VeePN.
4. Keep Financial Data Separate
Business users, especially, should utilize a designated workstation for all company banking activities. Other computers should be used solely for internet access and non-banking operations. When retiring the computer used for banking, ensure the backup of sensitive information and erase the hard drive before recycling it.
5. Use HTTPS
Ensure that your e-commerce website utilizes HTTPS rather than standard HTTP. By implementing HTTPS, your online shoppers’ data transmission from web browsers to your site will be encrypted, securing sensitive information like customer names and credit card numbers.
Additionally, if you continue to employ HTTP, Google might classify your site as unsecured for Google Chrome users, potentially decreasing traffic to your e-commerce store.
6. Implement a Password Policy
Businesses can significantly protect themselves from online fraud by implementing a password policy that spans the entire organization. This is because cybercriminals have a larger scope and capacity for harm when they possess passwords, as opposed to when they do not.
In addition to creating robust passwords that are sufficiently long and do not rely on dictionary words, employees must also understand the risks associated with password sharing and reusing passwords across multiple sites.
Passwords are used for various applications that may contain sensitive information, such as banking accounts, communication platforms, and accounting software. Neglecting best practices for passwords increases the potential damage that hackers can inflict through password-related online fraud.
7. Talk About Fraud
Consider developing a fraud prevention and detection strategy tailored to your business. This strategy should outline the controls and procedures to be implemented. Guide your staff, suppliers, and other contacts regarding fraud prevention and detection. Engage in open conversations about fraud, ensuring your staff comprehends the associated risks and the impact of losses on both the business and themselves.
8. Understand the Signs of Fraud
Business representatives who take the initiative to recognize signs of payment fraud will likely uncover some surprising characteristics. For instance, payment fraud is not limited to large transactions but can manifest as multiple smaller payments or repeated attempts made over time. Moreover, it can pose significant challenges for small businesses as a January 2018 survey revealed that four in 10 small businesses struggle with cash flow issues. Failure to detect wrongful transactions promptly can exacerbate these problems.
It is essential for the representatives responsible for bank accounts to perform daily checks on associated records and promptly report any suspicious activity. Implementing clear guidelines for employees’ job-related expenses, including recording and approval processes, can facilitate the identification of abnormal transactions.
9. Scrutinize All Online Requests
Some companies eagerly please stakeholders, rushing to meet any possible need without checking for potential fraud. Businesses must carefully evaluate online requests that appear legitimate, especially if the sender expresses urgency.
Many cybercriminals attempt to trick victims by emphasizing dire consequences, such as account closures or fines resulting from inaction. These fraudulent scenarios exploit fear. Consulting a lawyer or cybersecurity experts before making sudden decisions that could disrupt company operations is advisable.
10. Connect to a Secure Wi-Fi Network
Unsecured Wi-Fi networks can be exploited by hackers to gain unauthorized access to devices and obtain sensitive information. Therefore, ensuring the utilization of a secure home or office Wi-Fi network becomes crucial.
This can be done by installing a firewall, implementing access restrictions and guest permissions, and creating a strong password for your wireless network. Additionally, exercise caution when connecting to unfamiliar or publicly accessible Wi-Fi networks while away from home or the office.
Conclusion
There are many types of cyber threats and online scams, but most of them focus on human error. Your employee could connect to a hacked public Wi-Fi in a nearby cafeteria, where he eats and data will be lost, and possibly access to corporate servers will be tampered with. Or someone clicked on a dangerous link, fell for phishing tricks – all these are major risks, but you can protect yourself from them. Follow the tips listed above and your business will be more secure with minimal financial investment.