How to protect your company from becoming a victim of fraud

Every business is at risk of being the target of fraud. And if you fail to take steps to protect yourself because you think it can’t happen to you, you are leaving yourself open to an attack that could shut down your company.

“Fraudsters try new things every day, from compromising business email to accessing computers to steal information to demanding ransomware,” says Jennifer Bidlingmyer, senior vice president, Treasury Management sales director, Premier Bank. “Typically there is a breakdown in processes and procedures that allows fraud to occur. Partnering with your bank, your attorney, other businesses and law enforcement can help you implement policies and procedures to minimize your exposure.”

Smart Business spoke with Bidlingmyer about how to manage the risks to your business and how to prevent your company from becoming a victim.

How can businesses start to minimize risks?

Start with your team. Empower an environment of curiosity in which people are encouraged to ask questions and verify information and requests. Often when people are exposed to a fraud situation, it’s because some behavior has become normalized. For example, an employee receives an email from the CEO directing a financial transaction. The first thought is, I work for that person, and I have to do what they say. They let their guard down and fail to follow risk control policies, allowing the system to be exploited.

Empower employees to ask questions, to verify and confirm. It doesn’t matter who that email comes from; pick up the phone and verify. Never act on any financial transaction based on an email alone.

What processes can be implemented?

Warn employees about opening attachments. That’s your first line of defense. Review accounts regularly to make sure transactions look appropriate. And if you deal with physical checks, make sure you have locks on your mailboxes, and that your suppliers do, as well. It’s not sophisticated, but once someone steals a check, they have your routing number, account number and signature and can alter and duplicate the check to steal funds.

Your bank can also assist with fraud prevention services such as Check and ACH PositivePay, which give you full control over what is presented for payment to minimize exposure. Implement a continuity plan that includes all banking and steps to take if you believe your business, accounts, computers have been exposed to fraud. This will help minimize missed key action items in a stressful situation.

What businesses need to be concerned about fraud, and what other steps can they take?

Whether you are large or small, it’s not a question of if, but when, you or someone who works for you is impacted by fraud. Smaller businesses are doing more by themselves, making deposits and payments, making them more vulnerable. If you couldn’t access your accounts, how would that impact your business? Some bigger companies may be able to absorb that, but smaller businesses can be shut down.

Tell vendors you will not change payment information based on email alone and will need to speak with someone authorized to make payments to confirm the information. Too often, someone receives email that appears to be from a trusted source, but the email has been compromised and the recipient doesn’t think to question it.

Work with your bank and other partners to review their cyber policies and share your expectations. Your banking partner can do training and create awareness among employees, sharing stories of how fraud has impacted businesses and talk about what not to do. Your banker can also host client seminars to share FBI memos on local trends, best practices and how to protect yourself.

Keep employees up to date and aware of fraud and trends. Bring in partners, including law enforcement, to share what’s happening in the marketplace. Ninety-nine percent of the time, people want to do the right thing, but they need to be informed. And be prepared to defend against that other 1 percent, because they can cause havoc. While you can never entirely eliminate the risks, taking steps can lower your risk of becoming a victim. ●

INSIGHTS Banking is brought to you by Premier Bank

Jennifer Bidlingmyer

Senior vice president, Treasury Management sales director


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