“How can I protect my business from fraud?” is a common concern in the business world, and for good reason. According to a recent Trustpair survey, 9 in 10 U.S. companies were the targets of cyber fraud in 2024, and nearly 4 in 10 American companies were targeted by payment fraud more than 10 times during the same year. Don’t let your business fall victim to such unscrupulous efforts. Consider these fraud-prevention steps to avoid some of the most common types of scams:
1. Create Separate Business Bank Accounts — and Monitor Them Closely
If you haven’t already created a business bank account that’s separate from your personal bank account, you should do so right away. Both business and personal bank accounts typically offer protections against fraud, but keeping them separate prevents hackers from accessing your personal account if they gain access to your business account, and vice versa — limiting the damage they can do.
Once your business checking, credit card and other business banking accounts have been established, review them regularly to keep an eye out for any suspicious charges and immediately report any unrecognized transactions. (By using digital banking services or a mobile banking app, you can monitor your account balance and transactions quickly and easily without having to wait for a statement to arrive.)
2. Enable Account Alerts
Most banks closely monitor customers’ accounts for suspicious activities and report any suspected fraud to account holders. But an easy, proactive way for business owners to supplement these fraud prevention efforts is to set up digital alerts for certain types of account transactions. For example, you could set up an alert for any credit card charges exceeding a specified amount, or request to be notified when your checking account balance goes below a certain threshold.
3. Know the Most Common Types of Scams
Companies should understand the most common tactics criminals use to commit business banking fraud so they are prepared to recognize attempts and avoid becoming a victim. Some of the most popular methods used to access sensitive information or trick businesses into sending money include:
- Phishing: Fraudsters send official-looking emails, often with fake links included, in an effort to gain usernames or passwords they can use to access a business’ accounts.
- Smishing: This tactic, similar to phishing, uses texts instead of emails to trick recipients into providing account details.
- Fake Invoices: In this common tactic used to commit wire fraud, criminals send invoices for products or services that were never actually provided, hoping the recipient will pay without confirming the legitimacy of the charges.
- Overpayment Schemes: Scammers claim they sent excessive funds to a company and request a refund for the overage amount, while the original payment was typically sent via a check that will bounce.
- Check Fraud: Scammers steal, alter or forge checks and attempt to pass them off as legitimate.
- Business Identity Theft: Criminals impersonate a business by using its tax details or other identifying information to open lines of credit or apply for loans. (This is just one reason it’s important for businesses to protect sensitive information, such as their EINs and financial data.)
- Tech-Support Schemes: Scammers pose as IT service providers in an attempt to gain fraudulent access to a business’s computer systems or software, which can enable them to steal data or plant malicious software.
4. Educate Your Employees
One of the most powerful ways to support fraud prevention in business is to regularly educate employees on common tactics like those listed above. Employees should be taught to recognize and flag any suspicious solicitations they may receive. They should also know to verify any unfamiliar or unusual requests before acting on them, especially when payments or financial details are involved.
5. Put Strong Cybersecurity Protections in Place
In the digital age, having robust cybersecurity protections in place is a must for any business looking to prevent fraud and keep sensitive information safe.
- Use a reliable firewall to prevent unwanted network access.
- Install antivirus software — and keep it updated — to protect company data.
- Ensure your staff know and employ best practices for staying safe online.
6. Confirm Invoice Legitimacy
Your business should have a process in place to prevent fraudulent invoices from being paid. Before any funds are sent, verify invoices are valid by matching them up with goods or services actually received. For larger invoices that exceed a set amount, it’s a good idea to have multiple employees involved in the verification process. To avoid overpayment schemes, never provide any refunds for excessive payments before confirming that the original payment in question has cleared.
Arthur State Bank — Here To Help Your Business Grow
Proudly serving South Carolina since 1933, Arthur State Bank offers accounts, in-person services, and a range of convenient digital solutions to meet your business’s financial needs. Contact us today to learn how we can help with everything from business checking and credit cards to safety deposit boxes and business loans.
