Business fraud can come from inside or outside a company—from employees, customers, or even third-party suppliers. Your best defenses are education and a strong banking partner that’s security-minded, helping implement tools to protect your assets.
Scammers often pretend to be someone who you can trust. They may create a sense of urgency or intimidation, use untraceable payment methods, and prey on your good faith. The number one business rule these days should always be to trust but verify
Here are some general tips for keeping your business safe:
Don’t immediately believe your caller ID or the email address line. These are easy for scammers to fake. If something seems fishy, it probably is. You should always call a trusted, pre-published number to verify an unexpected request, especially if it’s urgent.
Before going into business with a new company, do your due diligence. Search the company’s name online with the term “scam” or “complaint” to find out what others say. Ask for recommendations from your network. They might know something you don’t.
Train your employees. Provide them with information on how scams happen, encourage them to talk to each other if they think they spot one, and remind them NEVER to share any sensitive information or passwords.
Verify your invoices and check your account statements regularly. Don’t pay an invoice if you didn’t place the order or receive the product. Monitoring your accounts will help you spot unwanted withdrawals.
Set procedures for approving invoices and expenses, and limit the number of people authorized to place orders and pay.
Question if someone asks you to pay with a reloadable card, wire transfer, or gift card. These untraceable payment methods are often indications of a scam.
Some other common scams that businesses see are:
Business email compromise is a type of phishing scam in which fraudsters try to hack, spoof, or impersonate the email address of someone you know. They may change one letter or number in a familiar email address to make their scam appear legitimate and then they ask you for money. For example, only emails coming from us at @texasfirst.bank are legitimate. Texas1stBank.com or TXFirstBank.com are not valid email domains for our bank employees, and any request from one of those will lead to trouble.
Scammers create fake invoices that look like something your business might use and hope whoever pays the bills will assume it’s something you ordered. They also know that if the invoice is for something critical, like your website, you may pay first and ask later.
Scammers might try to fool you into paying a nonexistent directory listing or scare you by saying you’ll lose your trademark if you don’t pay a fee immediately. They might threaten fines or lost licenses, and they often choose the most inopportune time to contact you – like when they know you’re in busy season or right before you clock out for the day – hoping you won’t question it.
Someone overpays with a check and asks you to wire the extra money back or to a third party. They may have a good story, but when your bank tries to process the original check and finds out it’s fake, you’ve already lost your money and are left responsible for the repayment.
Account Fraud is often the easiest type of fraud for an employee to commit. This is when someone is deliberately stealing from you, either by stealing money directly from the company via funds transfers, using a company card for unauthorized purchases, or taking office supplies for personal use. Keep an eye on your statements and inventory to spot these.
Scammers pretend to be from the bank and ask for your password or the secure access code to maintenance your account. Know that a true bank employee will never need your password or access code to service your account; we can use our secure software to help you from the back-end.
How can you protect yourself?
Make fraud reporting a part of your company culture. Educate your staff on all things cybersecurity-related. Remind them of the best practices and encourage them to report red flags.
Have specific and comprehensive anti-fraud, anti-bribery, and anti-corruption company policies. Implement the policies and enforce consequences when an employee violates the agreement to make sure the message is clear that you take these things seriously.
Perform surprise audits and inspections regularly. Regular checkups can help you spot fraudulent behavior and mitigate the damage immediately.
Have a response plan—plan for all the situations you can think of and research those you can’t. Then, develop a plan that addresses the severity of each particular incidence. Ask things like, in this situation: Do you notify employees? Do you tell customers, and how? How will you restore your data? Every real-life scenario will be different, but by having a plan and practicing the plan, you can mitigate losses
Keep detailed inventory and financial records to be able to prove any losses.
Partner with proven and secure organizations, especially regarding a scammer’s number one target – your money.
How can Texas First Bank help you?
At Texas First Bank, not only do we employ secure software and security tactics, but we also offer our business customers tools to protect you:
A strong, encrypted banking platform with multi-factor authentication
Real-time fraud monitoring and text alerts
SecurLOCK™ Equip that empowers you to set transaction limits, get alerts, and turn cards off and on from an app.
Positive Paythat automatically reviews ACH and check payments before they are paid to identify and flag any that you didn’t authorize.
Cash Management tools that offer tokenization, dual control, multi-factor authentication for sending money, the ability to assign permissions and roles, and more.
Looking to learn more?
Our team is here to help you understand best practices and products to protect you and your assets from business fraud. Reach out to us today to learn more.