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6 Ways to Protect Your Business from Online Fraud

6 Ways to Protect Your Business from Online Fraud

Although many business executives regularly assess the risks that could threaten their enterprises, they may not think online fraud is a threat.

It may especially get overlooked at smaller operations. However, cybercriminals look for vulnerable victims everywhere. Proactive behavior is essential for keeping businesses protected from fraud.

Here are six actionable ways companies can remain strong against fraudulent behaviors and tricks.

1. Perform a Security Audit

It's challenging for companies to know how to safeguard against online fraud if its representatives aren't aware of the respective problem areas. Undergoing a security audit enables the cybersecurity experts at a business to determine where the weak points exist. Patching those vulnerable points can make it less likely for cybercriminals to carry out online fraud, such as malware that demands a ransom paid to restore file access.

Paying a ransom to appease criminals may seem like a straightforward — albeit costly — remedy. However, it doesn't always get the desired results. A small survey of businesses that submitted ransoms after such attacks found that only 45 percent got the data back after paying. Even worse, the average amount given per company was $4,323.

No matter what a security audit reveals, it's crucial for companies to heed advice about how to strategically make their networks stronger against fraud attempts. Representatives might initially feel overwhelmed, worrying that the problem is too daunting to tackle, but the prevalence of online fraud makes instituting preventative measures worth the effort.

2. Implement a Company-Wide Password Policy

An organization-wide password policy can also go a long way in protecting businesses from online fraud. That’s because cybercriminals can do more damage and enjoy a further reach when they have passwords at their disposal, versus when they don't.

In addition to setting strong passwords that are long enough and do not use words found in the dictionary, employees also need to realize it's not safe to share passwords with colleagues or use the same passwords across multiple sites.

People use passwords to log into bank accounts, communication platforms, accounting software and many other applications that could contain sensitive information. If businesses do not have password best practices, the damage hackers can cause through password-related online fraud increases.

If an enterprise uses sites and services that offer two-factor authentication, it's smart to enable that feature. Two-factor authentication requires password users to have knowledge of the correct string of characters and possess something — like a temporary access code — before they can gain access.

For example, when many bank websites recognize that a user is trying to access an account from an unfamiliar computer, they send a code to a person by email or text to enter along with the password. Such an approach means that having a password alone is not sufficient, making those accounts potentially safer from online fraud.

3. Understand the Signs of Online Payment Fraud

When business representatives take it upon themselves to start recognizing signs of payment fraud, they'll likely discover some surprising characteristics.

For example, payment fraud does not always consist of large transactions and may come across as several smaller payments or repeat attempts made over time. It can also be particularly problematic for small businesses. A January 2018 survey showed that four in 10 small businesses struggle with cash flow issues. If wrongful transactions go unnoticed for too long, they can exacerbate those problems.

The representatives that handle bank accounts need to check the associated records daily and report anything that seems suspicious. Setting rules for employees' job-related expenses and how they should record such purchases or get them approved should make it easier to spot strange transactions.

Additionally, companies may want to invest in machine learning software that learns the characteristics of normal account activity and gives alerts when things are amiss.

4. Incorporate Online Fraud into Employee Education Topics

Fighting online fraud is a team effort, which means it should ideally take a top-down approach where the company leaders prioritize it, then encourage the employees to follow suit. Making that happen starts with training all employees to know what might constitute online fraud.

Some attempts capitalize on winnings and free things. A victim might get word of the chance to win a contest or get complimentary access to expensive software if they provide some information first. Fraud can relate to workplace transactions too. For example, much like online lottery scams that tell "winners" they need to provide sensitive information, such as bank account details, to receive the money - some fraudsters that target businesses assert people must give details to stay compliant with certain organizations.

One phishing attempt even involved cybercriminals posing as the Internal Revenue Service (IRS) and trying to get tax preparers to submit information that was supposedly for updating content on file with the organization.

If employees know some of the warning signs of online fraud, they should find that it's easier to avoid it and report unusual correspondences to the proper employees at their workplaces.

5. Realize That External Parties May Play a Role

Becoming more knowledgeable about how to protect a business from online fraud means being aware of types of fraud carried out by external parties related to a company, such as its customers and contractors.

Customers could attempt to engage in return fraud by trying to send back items that an e-commerce store carries but were not purchased at that outlet or returning items for invalid reasons. A recent instance defrauded Amazon of over $1 million and resulted in three individuals receiving lengthy prison sentences.

Amazon began issuing warnings or closing the accounts of shoppers who return too many things or do so for reasons not consistent with the majority of its consumers. Other stores monitor purchases in similar ways to crack down on these so-called "serial returners."

Concerning contractors, fraud can result if companies get billed for work that was never performed. That kind of online fraud might happen via freelancers who don't work on-site at companies. Businesses must engage in careful checks instead of blindly paying invoices received.

6. Scrutinize All Online Requests — Especially Urgent Ones

Some companies are so eager to please stakeholders, they rush to meet any need possible without checking for the possibility it's fraudulent. It's crucial for businesses to carefully evaluate any online requests that seem legitimate, especially if the sender conveys exceptional urgency.

Many cybercriminals try to get victims to fall for their tactics by emphasizing dire consequences, such as account closures or fines that could happen if people don't act immediately. Fraudulent scenarios like these capitalize on fear. It's best to get the advice of a lawyer or cybersecurity experts before making any sudden decisions that could disrupt company operations.

Online Fraud Affects Companies of All Types and Sizes

All businesses can ultimately be prone to online fraud attempts. Fortunately, awareness goes a long way in helping organizations pick up on potential characteristics of fraud and understand how best to fight back.

The suggestions here will help companies get strong starts in effectively curbing the problem and noticing which tactics are most appropriate for their organizations.

Interested in learning more about staying safe in this online world? Check out the Resource Links below and see how GlobalSign can help:

About the Author

Kayla Matthews is a Pittsburghian technology journalist who has written for Hacker Noon, Cloud Tweaks, Houzz, and more. She's also the owner and editor of the tech productivity blog, Productivity Bytes.

Note: This blog article was written by a guest contributor for the purpose of offering a wider variety of content for our readers. The opinions expressed in this guest author article are solely those of the contributor and do not necessarily reflect those of GlobalSign.

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