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Fraud is Everywhere: How to Ensure Your Small Business Stays Away from It

By: Andrew Deen

 

Fraud is Everywhere

Whether you’re a fledgling entrepreneur, a business student or a business owner, now is the time to learn how to protect yourself from fraud.

Fraud is a considerable problem for entrepreneurs. When malicious actors gain access to sensitive business data, the outcome can prove catastrophic. You can prevent a cyber breach from resulting in more severe consequences such as the theft of your customers’ Social Security numbers, identities or tax IDs as well as the mining of your company database or commandeering of your business accounts.

As counterintuitive as it seems, cybersecurity is especially crucial for small businesses because they lose twice as much during cyberattacks compared to their larger counterparts, according to the Association of Certified Fraud Examiners. Accordingly, you must remain extra vigilant and learn everything about cyber threats that you can if you are a business owner or plan to own one in the future.

Keeping an Eye Out for the Bad Guys

Some people might think that common sense is enough to avoid scams. However, malicious actors deploy varying schemes and tactics to trick their victims. As an example, hackers increasingly favor the tech-support scam to compromise small businesses. What’s more, they use more than one attack vector to ply their trade. For example, a hacker might try to dupe you by using a seemingly innocent advertisement, email, phone call or website pop-up offering tech-support. Instead of offering real help, however, they want access to your sensitive information.

Skilled hackers are exceptionally stealthy. Sometimes, they may impersonate a representative from a supplier that you’ve worked with for years. Remote management tools are a lifesaver when an authentic tech-support specialist helps you to resolve your issues. Unfortunately, however, malicious actors also use the tool when impersonating real tech-support providers to gain access to business networks. After gaining your confidence, they’ll ask you to download a remote access tool such as LogMeIn, TeamViewer or GoToMyPC.

Collaborating to Protect Commerce

The government recognizes that fraud can pose a severe threat to the economy. Identity theft affects the well-being of victims, businesses, organizations and government agencies. The Internal Revenue Service (IRS), for instance, is one agency that cybercrimes affect considerably. The agency is particularly concerned about preventing the theft of Social Security numbers because malicious actors can use them to file fraudulent tax returns. On its website, the IRS expresses that it’s working to mitigate tax identity theft with an aggressive strategy of detection, prevention and assistance.

The IRS works in collaboration with corporate entities to help combat consumer identity theft. Still, the agency implores people and businesses to learn what they can about cybersecurity.

Most of all, the agency warns that it will never contact an individual or business and request sensitive financial information. They suggest that people remain vigilant about this type of query despite the communication method—for instance, phone calls, text messages or social media. The IRS bulletin rounds out by advising readers that the agency does not call people or businesses with threats of arrest or lawsuits.

Understanding Current Threats

The United States Federal Trade Commission (FTC) works to protect consumers and businesses from fraudulent activities. Accordingly, the FTC maintains a listing that can help to familiarize you with the various tactics used by cybercriminals.

For instance, the site list links to cases of directory scams, where malicious actors promise to advertise your company and then invoice you for a service that they never provided. Other hackers might attempt to sell you freely available certification forms for filing your business with the state.

Still, other malicious actors may send you a bill for office supplies that you never ordered. This scheme highlights the importance of diligent bookkeeping. In a similar scheme, some office supplies scammers will claim an existing business relationship and send you free supplies—and later send you an expensive bill for the privilege. Of course, there are the tried-and-true hacking methods of phone cramming and collecting donations for nonexistent nonprofit groups.

If your organization faces an unusually high risk of succumbing to digital theft, you may want to consider hiring or contracting with an accountant who reviews your account and billing information to deter cybercrime. This accounting specialist, called a forensic scientist, can help you to avoid increasingly elaborate and complex financial crimes.

If You’ve Been Scammed

Some hackers are very good at their jobs. Resultantly, you may find the integrity of your business has been compromised—despite your best efforts to prevent it.

If you inadvertently pay a hacker or give them your credit card or account information, and later realize your mistake, contact your financial institution immediately so that they can stop payment. If the malicious actor compelled you to install any software, uninstall it and contact your IT person or vendor. Meanwhile, update all your software, including your virus protection.

If you’re earning a business degree, you can start learning the basics about how to protect your future enterprise by learning how to shield yourself from identity theft. Learning how to protect your identity is a great way to get into the mindset needed to maintain enterprise security.

Finally, remember that hackers will do anything to abscond with your sensitive information. A malicious actor may sound like the nicest person in the world, but don’t let anyone compel you to make bad decisions—no matter how nice they seem. If the person you’re communicating with is a legitimate service provider, they’ll have no problem complying with policies and procedures that you implement to keep your business safe.

Published: December 18, 2019
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Andrew Deen

Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and is currently writing a book about scaling up business. Twitter @AndrewDeen14.

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