It’s an unfortunate fact that while you’re endeavoring to generate revenue and run a successful business, there are individuals and collectives intent on separating you from your hard earned money in illegal ways.

Fraud is a very real issue for businesses both large and small; the Association of Certified Fraud Examiners say on average fraud costs companies with less than 100 employees over $150,000 per year.

Fraud prevention

So whatever size business you run, anti-fraud measures are key:

1. Control over paperwork

Forging paperwork such as checks is a time-honored way of extracting money illegally from an organization. Using accounting software that generates checks constructed in a way that makes them all but impossible to tamper with or forge is a major step in avoiding fraud.

This also stops the use of the company checkbook that can be left lying around and open to tampering with, and restricting check writing to specific employees helps security too.

2. Credit cards and bank accounts

Credit card fraud is popular as fraudsters rely on the fact some companies don’t monitor their credit cards or security as well as they might. They can sometimes get away with a bogus transaction that isn’t detected by the card holder until it’s too late.

Take the following precautions to avoid card fraud:

  • Don’t give out the credit or bank card security PIN to anyone other than the card’s specific user(s)
  • Check the account for the bank or credit card regularly to detect unknown transactions
  • Check paper bills carefully before filing them away
  • File bills, statements and paperwork relating to cards safety and securely – consider paperless billing
  • Try not to have one card used by many; better to allocate say an individual company credit card to specific staff and tell them to keep the PIN number confidential

3. ID fraud

A common fraud type; it’s reached the point where some burglars focus on stealing personal paperwork or a computer so as to access information enabling them (or people they sell the information on to) to create a bogus identity.

ID fraud manifests itself in various ways; a common one being people pretending to be you and accessing financial accounts having gained personal information.

Some steps to take:

  • Never divulge passwords by phone or email even if it sounds like a genuine request from your bank, credit card provider or another organization you deal with
  • File financial statements containing address and card and account numbers away carefully – if disposing of them remove identification first or preferably shred them
  • Change passwords for websites you visit frequently – especially financial such as credit card providers and banks

IT security

4. IT security

Fraudsters prey on IT vulnerabilities both in terms of hardware weaknesses such as no firewall and out of date software, and lax security precautions by users such as poor password handling.

It’s vital to ensure IT is properly secure and anyone who uses it adheres to sound security procedures.

5. Staff education

People error is a major way fraud is committed.

For example, persuading a staff member to divulge their password to the company’s IT system is a basic fraudster method, as are more sophisticated ruses such as befriending staff members and inveigling them to pass over sensitive information to enable fraud to take place.

Plan training to make staff aware of the risks and how to protect themselves and the company’s systems.

6. Background checks on staff

With more staff using their employer’s IT infrastructure and accessing sensitive customer data, ensuring they’re law abiding trusted people with a ‘clean’ past is important so consider running pre employment background checks.

Check you’re on the right side of the law in doing so though.

7. Insurance implications

Insuring yourself against loss in the event of fraud is important, but be aware that you must comply with the insurer’s requirements to ensure you’d be paid out if the worst happens.

Therefore, along with general protection as described above, be familiar with exactly what your insurance company would expect of you.

Data backup in the cloud

Back everything up

With so many organizations being reliant on their data and other information stored digitally, a regular and effective back up regime is paramount so as to get up and running again quickly after a fraud attack.