10 Ways to Protect Yourself and Your Business from Fraud

As the old saying goes, “an ounce of prevention is worth a pound of cure.” This is true for keeping colds at bay and for preventing personal and business fraud. When you consider that most business fraud can be attributed to a lack of proper control over information and assets, then you can instantly see the importance of prevention. It doesn’t matter if you are a small business or a vast conglomerate; there is a demonstrable benefit to be found through being diligent in protecting yourself from fraudulent activities. The following are the top ten ways to protect yourself and your business from fraud.

1.      Upgrade Onsite Security: 

A thief who breaks into your company offices or warehouse could not only steal property but also valuable information. That information can include credit card account numbers, computer passwords and all other forms of sensitive information. Once those numbers are obtained, the criminal could go on a virtual buying spree before you can make it into work the next day. This is why upgrading your on site security in the form of proper locks, alarms and security gates are crucial for preventing theft.

2.      Properly Secure Business Records:

Even with the extra alarms, there might be personnel who will be tempted to access important business information. That is why it should always be kept under lock and key after business. While it is convenient to have a list of all your account passwords handy, you really want to make sure that “prying eyes” won’t get a peek.   

3.     Add Shredding To Your Routine:

A shrewd identity thief will know right where to find the information they need and it’s not always in your office, but in your dumpster. Any paper that is being thrown out with any kind of company information should be shredded first. This is especially true for a small business that might not have secure dumpsters.  

4.     Don’t Divulge Over the Phone:

The natural instinct for anyone answering a company phone inquiry is to be helpful and courteous. That “help” might extend too far towards a potential identity thief who is trolling for information through a random “customer” call. Unless you initiate a call, don’t give out any vital company information over the phone to a stranger. 

5.      Lock Down Your Computers:

You might think it is easy to keep track of people who come through your office on a regular basis. However, when you consider all the messengers, delivery men, service technicians, sales persons and custodians you can see that the stream of outside workers, even in a small business, can be enormous. This is why your computers should have password protection. They should also be shut down when you are away from your desk.

6.      Install Computer Firewalls:

The protection from your computer needs to extend throughout the internet through updated firewall security measures. You need to protect your network systems from potential hackers who troll for businesses to steal from. If you have an IT professional who takes care of your IT network and systems, ask them for their recommendations. 

7.      Establish Strong Anti-Fraud Policies:

Your employees are going to be your best line of defense to prevent fraud. However, they can also become your weakest link. This is why you need to establish clear policies with regard to sharing company information. A rep from your company shouldn’t be out in the world broadcasting sensitive information. It could be unintentional, but that won’t matter if a fraud occurs from using this information.

8.      Set Up a Fraud Hotline:

Sometimes an employee could witness an act of fraud but they don’t want to directly report this incident to a manager. Setting up a fraud hotline or email address can provide staff members with the opportunity to share any knowledge of fraud. This type of hotline also tells anyone who might be thinking about a fraud scheme that they are being watched by their co-workers.

9.      Take Immediate Action:

The moment there is a report of a suspected fraud incident you should begin a thorough investigation. By taking immediate action you’ll let your staff know this type of behavior won’t be tolerated.

10.  Sever Ties With Ex-Employees:

When renting a new apartment, you should request that new locks be installed. This is also a smart policy with regard to ex-employees, especially those who were fired under undesirable circumstances. You need to make sure any previous access these employees had to sensitive information be changed. This could be swapping out passwords, canceling company credit cards and yes, in extreme cases, changing the locks.

Protecting your small business from hackers

It’s not only the large corporations that are targeted by criminals, but also small businesses such as yours. This is because small businesses do not have the resources that they require to protect their IT infrastructure. Here are a few reasons why you should improve your IT security especially if you’re a small business:

• You need to protect your customer’s credit card information. There is even a greater risk of fraudulent activity as a majority of credit card transactions are online.

• Manage your brand reputation. By having the best IT security in place, you protect your business and customers and, most importantly, maintain your reputation as a secure place to do business.

• Protection from viruses /spyware. Another potential risk is viruses, which can create chaos on your business. Many viruses can shut down entire computer networks and even email systems. Once a virus has infected your computer, it will start sending emails to anyone listed in your address book, harming your reputation. This threat alone should be enough of an incentive to improve your IT security.

Once your infrastructure is compromised, the cost to purchase new software and hardware or even to manage crisis communications can be high. It doesn’t matter if the threat comes from an employee, a virus or a hacker, there are some easy ways to prevent and avoid these events. Here are some tips in protecting your company:

1. Get a reliable host service for your website and database. Make sure that they are reliable and have a good reputation. Ask for client testimonials when vetting vendors.

2. Verify that all your employees are using the current and up to date browsers. One of the easiest ways viruses and spyware can infect a computer is by exploiting weaknesses found in the browser.

3. Make sure that an anti-virus program is installed on all computers. This includes your servers. Keep the program current at all times.

4. Manage all your passwords at a single place using a password manager. And ask your employees to create passwords that are random. Do not use easily remembered passwords such as family names, pet names and such. Ask your employees to not keep the passwords where they are easily accessible.

5. Monitor internet usage. As employees could inadvertently come across malware or phishing sites allowing their computers to be hacked.

6. Protect your Wi-fi connection. Password protect your connection and make sure that your hardware is modern.

These are some steps that you can take to prevent unauthorized security breaches and will provide you with a solid foundation to protect yourself from basic malicious attacks.

How to Avoid Being Defrauded

As if the recession hasn't presented us with enough business and financial worries, a new item has been added to the worry menu.
 

According to the 2009 PricewaterhouseCoopers' Economic Crime Survey, some 56 percent of companies surveyed have reported falling victim to white collar crime in the last year's survey period. This number reflects a 4 point increase over the last two years. Indeed, the figures are the highest in the last six years. There has been a 10 point increase since 2003.
 

It would appear that difficult economic times increase the incentive to commit fraud as a source of income. The end result is due, in part, to a greater vulnerability of many companies whose control systems have been weakened or even eliminated due to downsizing and cost-cutting. Fewer funds are being allocated for fraud detection, prevention systems and investigation. As a result, financial fraud is increasing both from within and outside organizations.
 

Certain sectors have suffered from fraud the worst in the last year including communication, financial services, insurance, hospitality and leisure. Asset misappropriation and accounting fraud were the most common types of fraud encountered by the companies surveyed.
 

As an end to the recession is not yet in sight according to many experts, it is felt that fraud may continue to increase. Certainly, as many companies are yet to take preventive measures, there are adequate opportunities for the talented white collar criminal.
 

Canadian judges have responded to this increase in fraud crime by handing down severe and harsh punishments for those found guilty. But, the number of crimes reported far exceeds those caught. Businesses would be well advised to keep their eyes open and their systems well protected.

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