Preventing fraud for business accounts

Safeguarding your business bank account is a sure way to avoid account fraud. But where do you start?

Being proactive and combating scammers is a great place to start, says Jeff Kopco, commercial loan originator at First Federal Lakewood.

“Education is key,” Kopco says. “Knowing patterns and continuously staying diligent, amongst other things, is a great place for businesses to start when they’re working to prevent fraud.”

Smart Business spoke with Kopco about how businesses can take precautions to help prevent fraud.

What are some tips to prevent fraud?

Peace of mind starts with education for the whole staff — from the owner all the way to the bookkeeper and customer-facing employees. Oftentimes scammers target employees who are constantly sending emails to and from their vendors. It’s crucial to have policies and procedures in place so every employee knows what to look for and how to stay diligent.

Next, be aware of patterns and changes to patterns. If an email comes in from a vendor that includes misspelled words, is typed in all capital letters or the message seems irate, the first question a business owner or employee should ask themselves is if this is normal behavior from the vendor. Oftentimes, the answer is no and should be taken seriously as a fraud attempt.

Employees should be comfortable enough to know who to contact in case of any questions or concerns. As a business owner or manager, another helpful habit to practice is always contacting your banker when an employee is leaving. This helps to ensure they get removed from any important accounts that they may have access to and allows the bank staff to be proactive — just in case the former employee’s work account gets compromised and the bank can act on it as soon as possible.

What are common security risks?

Bank account fraud comes in many different forms and understanding what to look for and what’s considered a normal process to handle fraud within a business environment is the first line of defense. Two common techniques are important to watch out for.

The first scam technique is called spoofing. Spoofing is a common technique where a scammer uses someone’s identity to trick the recipient into thinking the message is coming directly from an individual they know. Always be aware of the links that come in through an email, text message or through browsers. In a business setting, scammers may impersonate a vendor or client and may send an invoice or payment request asking the business to resend the payment to a different bank account.

Smishing, or text message scams, are the second common scam technique and are also big threats to businesses. For example, employees may receive a text message from someone impersonating their boss asking them to purchase a gift card in large sums of money and replying to the message with the gift card’s numbers.

Are there any tools or services that help prevent account fraud?

Business owners should take the necessary precautions to protect their business accounts using treasury management services, like ACH origination and positive pay, and knowing what their insurance may cover in case of a loss. While insurance specifically may be a pricey service, it’s important to know what policies are in place or available to take advantage of and who to contact.

ACH uses an encrypted system that keeps a company’s information protected, while positive pay helps deter check fraud by matching checks clearing your account to a ‘checks issued’ file that is provided to the bank, helping to prevent any suspicious checks from being processed.

Fraud prevention tools extend beyond the bank, too. Good habits start by using encrypted email to send and receive important or private documents. Always make sure to ask for an encrypted link when talking to a banker, vendor or client.

Lastly, make sure to have multi-factor authentication in place for all digital accounts. Many banks will require it when sending money but it’s also possible to add multi-factor authentication to most logins for free. This may help prevent a scammer from hacking accounts. ●

INSIGHTS Banking & Finance is brought to you by First Federal Lakewood

Jeff Kopco

Commercial Loan Originator


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There are business banking tools that can help you mitigate fraud.