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How to Protect Small Businesses from Fraud and Cybercrime
Not worried about cybercrime? According to the Association of Certified Fraud Examiners (ACFE), companies that have less than 100 employees lose $155,000 per years as a result of fraud, which is much higher than the loss incurred by larger companies and by businesses not operated by their owners. Fraud may have not affected your small business, but when was the last time you went through your credit card statement line by line? After all, one if the most frequent sources of fraud is credit card abuse. Other fraud stems from an overall lack of security from inadequate network and computer security, and weak background checks when bringing on new employees. However, your business is not helpless - you can take the following steps to protect it. Failure to do so can have you facing small business fraud litigation.
1. Protect Credit Cards and Bank Accounts
This is the most vulnerable aspect of your business in terms of fraud and requires the most attention. Separate all your personal banking and credit cards from your business accounts, which will stop hackers from gaining access to all of your money in the case of a security breach. This simple separation will also make it much easier for you to track your business expenses and file taxes. However, daily accounts checks are still necessary, as catching fraudulent behavior early is the best way to stop it and your losses.
You also have to use your card wisely. Do not hand over the card or read its number to any employees and vendors that you do not completely trust. You should switch to online bill pay (it’s also good for the environment) in order to avoid paper bills with sensitive information. If you still receive paper bills, store them in a safe place and send them through the mail via a secure mailbox for sending and receiving bills (if you don’t have this, then you can drop your mail directly at the post office). The digital answer to this step is using a dedicated computer for banking. Designate one computer to be used for electronic banking and do not use it to visit social media and email sites, and especially not to surf the web. You should also avoid mobile banking, as it is particularly vulnerable with the spread of user-operated Wi-Fi hotspots. However, there are ways to secure mobile devices, as well.
2. Secure IT Infrastructure
A good firewall and antivirus, malware, and spyware detection software are IT basics for anyone that owns a computer, let alone a business. If you have the resources to alter your IT infrastructure, it is advisable to consider joining more than 25 percent of small businesses in the United States in virtualizing your server. At the end of the day, you may end up needing a disaster preparedness plan in the case of either a man made or natural disaster - or if this catastrophe is the cyber attack you have been trying to avoid. According to the SBA, 40 to 60 percent of small businesses never reopen after a disaster. Create a disaster recovery plan so you and your employees can easily access your data and jump start working again. There are many different ways to do this, but the most important thing is to automate backups and build redundancy. Throw in a password policy and make sure your employees are regularly updating passwords and making them complex.
3. Pay Attention to Employees
The best way to curb employees’ fraudulent behavior is to hire the right people. If you’re not already, then you should consider implementing employee background checks, especially if this person will have access to sensitive financial information, cash, and valuable merchandise. However, this can be a touchy subject and you should consult labor laws and HR professionals as to the proper and legal way to conduct background checks.
Your employees may be your greatest vulnerability, but they are also your greatest assets on the front line. Hold training session on basic security threats, whether it’s online or in real life, and teach preventative measures. Training can be enforced by establishing institutional policies that guide employees on the proper handling of confidential information, such as financial data and customer and personnel information.
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