Fraud is a significant problem for businesses of all sizes, but thieves are likelier to target small business owners. It can be devastating financially and in the damage, it does to a company’s reputation and public image.
Fortunately, there are ways to protect your business against fraud. The key is knowing where to look and what to do.
Know Your Company’s Vulnerable Spots
Identifying vulnerabilities within your business is the first step to protecting it from fraud. It also can help you thwart a crisis.
You can find the most vulnerable spots by examining how your company keeps personal information. This may include names, Social Security numbers and other identifying data that can be used to commit fraud or identity theft. Fraud-related disputes are expensive and painful for all parties involved in the payments ecosystem. They also negatively affect cardholders forced to undergo a complicated claims process. Fraudulent chargebacks may lower revenue and acceptance. Retailers experience lower sales and more complex customers as a result. Card, not present fraud may cause card issuers to turn away more prospective customers who would otherwise make excellent customers due to the high cost of recovering fraud losses. You could resolve this matter with the aid of a chargeback company.
Start by inventorying where your company stores information, from file cabinets to computers, laptops, mobile devices and flash drives. You should also look at who sends sensitive data to your organization, from contractors and call centers to customers.
Using a third party to perform a vulnerability & threat assessment can help uncover new threats that might go unnoticed. You can use this information to prioritize the vulnerabilities in your system and protect your network from cyberattacks. First-party fraud, on the other hand, frequently poses a credit risk issue; delinquent accounts are sent to collections for a series of treatments. Contrary to third-party fraud, the transactions are carried out with precise information and what appear to be honest intentions. This makes it much harder for a fraud detection team to find fraud. This allows for the eventual write-off of first party fraud as uncollectible debt, occasionally unknowingly sold to outside collection firms.
Keep Your Company’s Records Organized
Keeping your business’s records organized is essential to running a successful company. The process can be time-consuming, but it’s worth the effort if it keeps your company from being subjected to fraud and other crimes in the future.
The first step is determining what documents must be kept and where they should go. Some records, like customer lists and inventory, can be easily stored in a file drawer, while others need to be kept in a secure place, such as a fire-resistant file cabinet or safe-deposit box.
Inactive documents should be disposed of when they no longer serve the company’s needs, while active ones should be kept up-to-date and accessible. Depending on the company’s procedures, they may be needed regularly for legal, financial or historical purposes.
Keep Your Employees Up-to-Date on Security Issues
Educating your employees about security issues is one of the best ways to protect your business from fraud. Ensure they understand the importance of strong passwords, two-factor authentication and password storage software.
Likewise, educate them about recognizing phishing emails and other forms of social engineering that might lead to unauthorized access to company data. This will make them more likely to report security issues to you promptly.
It’s also important to periodically test employees’ cybersecurity knowledge. A simple survey or email can be a quick and easy way to do this.
Employees who leave their laptops unattended in public places or unsecured WiFi hotspots are at a much higher risk of being infected with malware, mainly when they use weak passwords.
In addition, it’s essential to update all your company computers and mobile devices regularly. Out-of-date software is a significant security concern that can be exploited by hackers who have discovered loopholes in your system.
Have Tighter Front-Door Entry Protocols
Having tighter front-door security is an effective way to prevent thieves from making off with your company’s most prized possessions. It also makes for a more comfortable work environment and lower insurance costs. While you’re at it, get your employees to be more mindful of what they take home or leave behind. This will prevent a significant snag in the first place. The key is a robust process for monitoring employee interactions and a well-thought-out and tested system. Implementing a formal employee training program is the best way to accomplish this.