Fraud and cybersecurity should be a major concern for each and every business owner.
According to the latest AFP Payments Fraud and Control Survey, 62 percent of companies experienced attempted or actual payments fraud from business email compromise (BEC) in 2020, and 34 percent reported financial losses as a result.
The recent COVID-19 pandemic exaggerated these statistics, as the continued remote work conditions have unfortunately opened the door to an increased risk of fraud.
The good news is that there are a number of best practices for protecting your business assets. Below are some tools and tips that our Treasury Management team recommends to stay ahead of the risk.
1. Employees are your front line of defense.
Preparation is the key to success. Business owners should invest in ongoing virtual training to ensure employees are up-to-date on the latest policies and procedures. Important Note: You’ve likely adjusted how your organization operates in light of COVID-19. Despite these changes and the stress they can cause, encourage employees to take breaks to keep themselves fresh and alert, so that protocols (even while working from home) are always at the forefront of everyone’s minds.
2. Stay up-to-date.
Fraudsters sometimes use the names of real organizations, like the Small Business Administration (SBA) in their phishing attempts to add a layer of credibility. Staying on top of these evolving schemes, and vigilantly educating your employees on them, is one just one other way to protect your business. Important Note: Phishing attempts often impersonate C-suite level employees, requesting immediate payment or other financial transactions to defraud your organization of funds. Not sure where to start?
Here are a few other tips I recommend to my own business customers:
• Traditional payment methods such as checks should have dual controls in place to reduce the risk of any internal fraud
• Payment apps like Square, CashApp or Venmo require verifying details like the recipient and amount is critical
• All invoices should be carefully reviewed to ensure that nefarious attackers did not interfere
• Implement fraud detecting banking tools: Automated Clearing House (ACH) or Positive Pay, which protects your account from unauthorized check and incoming ACH transactions Reconciliation detects potential fraud, and if acted upon within 24 hours of an incident, dramatically increases the chances of recovering your money
• Create text and email alerts to stay on top of your business’s accounts and financial activity
The bottom line: Fraud is an ongoing battle that your business must be prepared for. Unfortunately, it is not so much a question of if attempted fraud will happen, but when. There are many steps business owners can take however to detect payments fraud (and stop it) early.
Jacqueline Nolan is vice president of Treasury Management at Rockland Trust. She can be reached at 508-732-3362 or Jacqueline.Nolan@RocklandTrust.com
To learn more, download the free Rockland Trust Fraud Prevention Checklist: https://bit.ly/3hjoNhs
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