How to hide your business from financial fraudsters
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Financial fraudsters prey on people’s trust, convincingly posing as their bank or altering payment information to seamlessly steal money. Fortunately, there are ways to spot suspicious activity and mitigate damage from fraud. Here are today’s most common scams and how to protect your business from them.
Imposters Among Us
The Federal Trade Commission reported a record high of more than $10 billion lost to fraud in 2023 — $2.6 billion of which was due specifically to imposter fraud.
One of the most common signs of imposter fraud is an email, call or text (seemingly from your bank) alerting you to suspicious transactions on your account. This is an ingeniously nefarious scheme, as scammers often replicate the bank’s email address or phone number to phish for financial information. However, banks would never directly ask for your account number or request that you transfer funds.
When in doubt, delete the email or hang up the phone and then call your bank from the number that appears on your credit card or the bank’s official website. To be extra safe, maybe visit your local branch and speak to a representative face to face.
Funds are rarely recovered in cases of imposter fraud, so it’s important to sniff out the fraudsters before they strike.
You’ve Got Mail … Fraud
Mail fraud is a bit more difficult to prevent. It could be an old-fashioned robbery in which someone suddenly knocks over a mail carrier and runs off with their bag. This is more common than you’d think, as the United States Postal Service has reported hundreds of these robberies within the last five years.
Cases of mail fraud can also be sneakier, like someone snatching the key to a postal drop box or secretly delivering mail to fraudsters in exchange for payment.
If a fraudster finds checks in the mail, they can use them to make counterfeit ones or change the payee information so the money eventually makes its way back to the fraudster. They can also steal a business owner’s money through personal information in bills, bank account statements, tax returns, etc. Most banks offer services to help protect you from mail fraud, such as:
- Automated Clearing House (ACH) transfers: These reduce the need for paper checks by enabling the electronic transfer of funds, allowing online bill paying and direct deposit.
- Positive Pay: This service enables banks to detect fraud by matching the checks that a business issues against those presented for payment, identifying the correct, corresponding dollar amount, check number and bank account number.
Data Breaches
Last year, data breaches spread across the nation like wildfire when hackers infiltrated the MOVEit file transfer software to steal sensitive information from organizations.
Ways to combat the risks associated with this kind of data breach include:
- Checking your credit report.
- Freezing your credit (Even if a fraudster has your financial information, this makes it more difficult for them to take out money or apply for credit cards in your name).
- Monitoring your bank account.
- Changing your passwords and login information on banking sites and apps, and enabling two-factor authentication.
Business owners are a common target of scammers, with companies losing approximately 5% of their revenue every year to fraud. Smaller businesses suffer the most, as they’re usually more hesitant to invest in advanced security. But as you can see, there are simple steps you can take and bank services you can easily use to keep your company safe.