4 Tips To Help Prevent Business Fraud

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With the age of the internet and the availability of modern technology, your business can be a target by fraudsters online. This situation is commonly known as business fraud, and it happens when a person or entity commits an illegal act, causing financial gain. Also, it can appear or be hidden as legitimate business interaction. 

Protecting Your Business 

Thus, whether it is identity theft, telephone scam, payroll fraud, cloning of a credit card, and other fraudulent acts, every type of attack may seem to be difficult to handle. Fortunately, the following tips may help safeguard your business against fraudsters: 

1. Conduct A Security Audit 

Before anything else, your business needs to perform a security audit to protect your company against risks associated with business fraud. When you have a security audit in place, you can help your cybersecurity experts to figure out the weak points of your overall network system. 

By identifying these areas as early as you can, you will be able to strengthen them, making it less likely for cybercriminals and fraudsters to carry out their fraudulent acts against your business. 

Moreover, conducting a security audit allows you to strategically make your security features better against any fraud attempts. These strategies may include the purchase of reliable products for fraud prevention designed to protect your organization’s overall reputation as well as financial health. 

2. Do A Background Check On New Employees 

One of the common types of business fraud is employee fraud, and it usually happens when an employee deliberately deceives, lies, or steals from a company to get compensation or benefits. In most cases, employee fraud can occur through theft of cash, unauthorized billing, overpayments, money transfers, bribery, kickbacks, asset misappropriation, payroll fraud, and a lot more. 

To prevent your business from getting victimized by employee fraud, you should do a background check on new employees to avoid inviting convicted felons, hackers, or predators from being part of your organization. When you perform a background check, you will get to know all your potential employees and see whether they have a criminal history or any information that will lead to suspicion. 

With this, you will be able to properly prevent or handle theft and embezzlement and other fraudulent acts in your company. 

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3. Provide A Protection Policy To All Your Financial Transactions 

As a business owner, you have a responsibility to safeguard your financial affairs against fraudsters, hackers, and cybercriminals to ensure a stable financial situation for your organization in the long run. 

To avoid becoming a victim of banking or financing fraud, the following steps should be taken: 

• Make sure you have a separate bank account for your business and personal transactions so even if the fraudsters have access to one account, they can’t have the other. 

• Check your bank’s security systems in terms of online banking, including an automatic log-out feature. 

• Come up with a well-monitored reimbursement policy for employee expenses to ensure accurate and transparent liquidation of money. 

• If there is a need to provide credit cards to selected employees, look into the available fraud protection features, including notification alerts, should the employee spend beyond the allowable amount. 

• Manage your bills by going digital to avoid a bill with banking information from falling into the wrong hands. 

4. Follow Proper Password Practices For Your Organization 

As a business, your computer systems may contain sensitive information, which shouldn’t be exposed to hackers and cybercriminals. For example, they may store information regarding your bank accounts, accounting software, communication platforms, and other applications lodging confidential data. 

Because of this, your organization needs to observe some password practices to protect your computer systems and prevent business fraud altogether. These can include: 

• Making strong and secure passwords long and difficult enough to discover 

• Implementing a policy requiring employees not to use the same passwords across different programs or share passwords with co-workers 

• Providing two-factor authentication to ensure the person asking for access has the authority to do so 

• Making sure nobody’s around when typing your password 

• Changing your password from time to time 

There are many ways to help you come up with a company-wide password policy. By having these practices, you can reduce the risk of becoming a victim of password-related business fraud that’s prevalent in the industry. 

Final Thoughts On Avoiding Business Fraud

Regardless of size and type, all organizations can be susceptible to business fraud and company scams. Luckily, by following the tips mentioned above, you will be able to keep your business safe despite the threats and scammers. 

Remember, a business that is protected against hackers, fraudsters, and cybercriminals has better chances of thriving and becoming successful.

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