Best Practices to Protect Your Business from Fraud

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How important is it to protect your business from fraud? A 2020 fraud survey by PwC reported six incidences of fraud among a certain group of companies over one year. The survey also estimated the total cost of fraud among all companies in the US to be about $7 billion in a year.

Business fraud is now a major threat to companies. It has become even more rampant during these COVID-19 pandemic years, where many people have lost their sources of income.

Many fraudsters now use the internet as their main mode of trade. This is one of the reasons why cybercrime is on the increase. Moreover, its complexity and anonymity make it hard to prevent before it is too late.

Businesses are losing millions through cybercrime. This is why business owners should invest in more robust cybersecurity systems and programs, such as the Web Scraper API, to protect their companies from fraudsters.

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Why Should You Monitor Fraudulent Activities?

Fraudsters typically look for weak links and vulnerabilities in your business systems. This is where they can stage their attack. Therefore, you must protect your business by strengthening your business against fraud.

To strengthen your business from fraud, you need to understand the methods and tricks fraudsters use to scam companies. Through this, you can know which part of your security system to strengthen to protect your business from financial losses.

It will also help you to know which tools to use to fend off scammers, such as a web scraper like the Web Scraper API, to monitor and protect your websites. With that said, understanding the methods of fraud and monitoring your security system’s vulnerabilities is critical.

What Happens When You Don’t Protect Your Business from Fraud?

If you do not protect your business from fraud, you put the business at risk for the following:

• Huge financial losses
• Business reputational losses
• Loss of clients, vendors, suppliers, or business partners
• Loss of time
• Total business collapse

Types of Business Fraud

There are two main types of fraud that are threatening many businesses. These are:

1. Business Email Compromise

A business email compromise is one of the most common methods fraudsters use to scam businesses. This is a type of fraud where scammers persuade businesses to provide sensitive information or make payments.

They then access unauthorized business email accounts, monitor the company’s activities, and impersonate a stakeholder to scam the business.

Scammers obtain this information through social engineering, phishing, social media stalking, account spoofing, malware attacks on clients, billing systems, or online message traffic.

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2. Data Fraud

This is another type of fraud that a business needs to protect itself from. In this type of fraud, cybercriminals steal business information from companies’ databases. That is, they target financial information, personal information, secret project blueprints, and other classified information.

They then use this information to ask for ransom from the companies or sell it to competitors. Data fraud also includes malware attacks where companies are locked out of their own systems and held at ransom.

3. Asset Misappropriation and Insider Fraud

Sometimes fraud comes from within the company. In other words, employees steal cash or use company assets for their benefit. This is considered misappropriation of company assets.

An employee can also use granted access to steal valuable data or company information to commit digital fraud.

Best Practices to Protect Your Business from Fraud

So how can you protect your company from business fraud? Here are some of the ways:

1. Establish a Dual Control System

Businesses should have a dual control security system for online banking. In this case, it should include an electronic approval system for payments, preferably on separate computers.

You should also have a minimum of two employees involved in every business transaction. This will help to ensure authenticity and accuracy. Dual control systems add a layer of protection to your business transactions. This makes it more difficult for fraudsters to compromise your transactions.

2. Enhance Password Securities to Further Protect Your Business from Fraud

It would help if you always created complex passwords for your accounts. Also, make sure that each account has a different password. Moreover, you should never use personal information such as family names, birthdays, phone numbers, or addresses.

This is because passwords based on personal information are obvious and easy to figure out. Additionally, having wrong answers to your security authentication questions can be an added security strategy. Moreover, only a few people should have access to passwords linked to sensitive accounts.

3. Use Multi-Factor Authentication

Added layers of security make it difficult for scammers to infiltrate your business. Therefore, you should always have a double or multi-factor authentication system. This proves the person signing in is authorized to do so.

These methods may include email codes, SMS codes, app codes, voice or facial biometrics, and others.

4. Install Proper Firewall and Security Software

Invest in firewalls and security software to protect your emails and websites. Also carry out regular patches and system updates to secure your system from cyberattacks.

Some examples of these security software solutions and firewalls may include web scraping with the help of automated data collection tools. Automated tools such as QR codes, barcode scanners, RFID readers, or position scanners allow quick authentication of information.

Web scraping helps in extracting data from websites. As a fraud protection tool, web scraping tools such as Web Scraper API proxy rotations make it difficult for scammers to obtain sensitive information from the website.

This is because their websites can easily be indexed, identified, and blocked from accessing any information. It helps you track traffic data for your website. With this information, you can know your vulnerabilities. Consequently, you will also know the security measures to invest in. If you’re looking for a top-quality web scanning tool, a great example can be found at Oxylabs.

5. Monitor and Evaluate Your Business Activities

Business owners should make it a habit to monitor the company’s financial activities routinely. So you should review your accounts daily. Set transaction limits and email alerts to monitor your transaction history. You should also monitor employee logins and activities past working hours.

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6. Establish Employee Training on Security Awareness to Protect Your Business from Fraud

You can also introduce a training program for all employees that teaches them security awareness. The program should include regular tests and compliance monitoring.

7. Invest in a Comprehensive Fraud Risk Management Policy

A fraud risk management policy can act as a backup plan if your security systems fail to avoid a scam. It is also a protection measure adding to your security system against fraud.

8. Ensure Safe Discarding of Business Documents

To keep fraudsters from getting sensitive information, it’s best to always shred sensitive documents before disposing of them to the garbage collectors

9. Verify Payment Requests or Information Through Phone Calls

It’s also best to use phone numbers on your contact list to verify payment requests from your clients or vendors.

Take Appropriate Steps to Protect Your Business from Fraud

There are a lot of fraudsters out there and within businesses. They are trying to reap where they do not sow. It is up to businesses to take the above security measures to make sure fraudsters fail and your business continues safely.

Owners and managers should protect the business by using available tools to ensure the company is safe from potential fraud threats.

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