Local businesses across countless industries must be aware of the impact that various types of fraud can have on their day-to-day operations. The global e-commerce industry alone loses almost $50 billion every year, which is a staggering example of how large the problem has become. Fraud has been around, in some shape or form, since antiquity but new technology and greatly expanded business opportunities in the 21st century have dramatically accelerated the dangers.
Having a top-tier cyber security solution is just one piece of the puzzle. Fraudsters are always looking for new ways to get an edge over unsuspecting businesses, so you must be careful and extremely vigilant. The first step towards operating a watertight company that can deal with potential fraud attacks is learning the most common ways that criminals target local businesses.
These smaller and more localized companies can often be easier prey than large multinational corporations. There is typically less money spent on things like cyber and office security like Akamai, making it easier for fraudulent activity to slip through the net. But don’t worry. Having the knowledge of the main techniques that are used to trick local businesses can greatly improve your chances of avoiding fraud attacks. Stay with us for the lowdown.
Why Local Businesses Must be Vigilant to Combat Fraud
Fraud can manifest itself in many different ways. Some cases can be more serious than others, but there will always be a level of danger. Local businesses must stay vigilant to combat fraudulent attacks. Otherwise, significant losses could potentially cripple a company’s operations and force it to fold.
As mentioned, fraudsters are making almost $50 billion a year from e-commerce businesses alone, so imagine how high that figure is when you factor in all the other types of small and local businesses. Learning about the ins and outs of how fraud attacks happen, and when to act, is a fundamental part of keeping safe.
This can be daunting but there are useful tools out there to help. For example, this guide to monitoring fraud with SEON illuminates some of the main things to watch out for. It’s a great place to start and we’ll go into more detail throughout this article.
The Most Common Methods Fraudsters Use to Target Local Businesses
Monitoring fraud is an incredibly important daily activity that can dramatically improve your overall business security. But here’s the thing, without knowing the common methods that fraudsters currently use, you’ll struggle to stop potential problems at the core. Below, we’ve expanded on some of the main tactics to watch out for. Consider these and build an appropriate fraud protection plan to combat them.
Fraudulent Insurance Claims
Fraudulent insurance claims are one of the oldest tricks in the book. If your local business is a customer-facing shop, venue or other type of public establishment, you’ll need to be extremely careful to minimize any possibility of customers injuring themselves. This should be a given but some sly fraudsters are extremely skilled at purposefully sustaining small injuries and claiming money from your business insurance.
Other things to look out for are any incidents involving company cars. It has been known for people to purposefully cause a minor collision if they see a company car on the roads. For this reason, we always recommend installing dash cams so you can fight any wrongful claims.
Phishing emails are another of the most common fraud methods targeting local businesses. Teaching your employees about the dangers of phishing is absolutely essential as it can be a serious issue.
These emails (or texts and other modes of communication) trick people into pressing a specific link that redirects to a dangerous page, which can result in stolen information or even worse. The best way to combat these threats is to ensure your anti-virus and firewalls are up to date, alongside educating staff about the tell-tale signs of phishing attacks.
Fraudulent Office Supply Sales
Think it’s time to change your photocopier or other office supplies? Be careful. There is a growing number of fraudulent actors looking to take advantage of local businesses’ needs for various office essentials.
You should always do vigilant checks on any companies looking to sell you contracts for things like photocopiers, printers or other office supplies. Many fraudsters can call out of the blue and slowly convince you to buy something you actually don’t need. Even worse, you may end up purchasing a contract for something that never turns up.
Bank Account Hacks
As you can imagine, a bank account hack on your business can be extraordinarily dangerous. You could stand to lose pretty much everything if you don’t identify a bank account hack in time, so staying vigilant is of the utmost importance.
Bank details can easily be stolen via phishing attacks, so be careful. It’s also a good idea to check all company accounts several times a day to ensure everything is as you would expect.
Many fraudsters have grown exceptionally skilled at faking invoices and slipping them through the net. For example, they can track your outgoings and subsequently design an invoice that looks very similar to a genuine one you have paid before.
Automated invoicing and accounting is arguably the best way to catch rogue invoices. You must also ensure that all employees know the appropriate process when dealing with invoices so they can easily catch any fraudulent cases.
Daylight robbery is more often known as theft, but for small office-based businesses, this can also be a devastating type of fraud. For example, you may have a random repair man come to the office one day and walk out with a piece of office equipment he’s supposedly taken to fix.
Having security on the door is the best way to combat this. We also recommend using CCTV cameras from companies like CCTV Camera Pros and keeping staff vigilant about the possibility of fraud via daylight robbery.
How can Local Businesses Prevent Fraud Cases?
Although fraud is a huge problem nowadays, there are many ways to ensure your business doesn’t fall prey to these criminals. The Met Police lists some easy ways to prevent fraud. Some of these include
- Having regular meetings regarding fraud and developing a clear strategy
- Running audits to check where your business could be vulnerable
- Keeping tight control of finances
- Ensuring your overall business operations are secure
Don’t Let Fraud Stop You From Pursuing Your Local Business Dreams
Last but not least, don’t let a fear of fraud stop you from pursuing your dreams. Local businesses can often benefit from support and rewards, helping them take the next step. Who knows? In the future, it could be you!