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Running a business comes with many challenges, from keeping track of inventory and funds to creating difficult decisions about how one can invest resources. But what happens when people attempt to scam you? Whether it’s fake emails or fake invoices, falling for scams can completely disrupt your enterprise. Despite all the advanced technology and security measures available, small businesses are still prime targets for fraudsters. Due to limited resources and often inadequate defense, they are easy prey. Only in the last 12 months 96% US corporations have been targeted by at least one fraud attempt. That’s why it’s more essential than ever to be vigilant and able to outsmart these scammers.
1. Phishing attacks
Phishing attacks are an insidious tactic used by cybercriminals to trick people into revealing personal information similar to passwords and financial details. In fact, phishing is the most typical type of cybercrime, and it is estimated that 3.4 billion spam sent every day.
How can small businesses protect themselves? Start by recognizing phishing attempts and training your employees to do the same. Be wary of unexpected emails or messages and double check they are real before responding. Research shows that corporations that commonly train their employees in cybersecurity are much less vulnerable to this sort of fraud.
Then make sure your emails are protected with email authentication protocols similar to SPF (Sender Policy Framework) and DKIM (DomainKeys Identified Mail). These protocols help confirm the authenticity of email senders, making it tougher for attackers to spoof legitimate addresses. Implementing these measures can significantly reduce your risk of falling victim to phishing attacks.
2. Invoice fraud
Invoice fraud schemes trick corporations into paying for goods or services that were never delivered. These fake invoices can easily deceive employees, resulting in unauthorized payments. In 2019, this sort of fraud caused losses for businesses $132 million.
Watch out for red flags similar to discrepancies in billing details, invoices from unknown vendors, and payment requests to unverified bank accounts. To protect your enterprise, it’s essential to have a solid payment approval workflow. Start by organising rigorous invoice approval processes that require multiple reviews and authorizations before any payment could be made.
Make it a habit to confirm the identity of suppliers through independent means, especially for latest or unknown suppliers. Use email authentication protocols to detect and block phishing attempts related to invoice fraud. Review your accounts payable transactions commonly to detect any unusual activity early. Also train your employees to acknowledge and deal with potential invoice fraud. By taking these precautions and ensuring a solid payment approval workflow, you’ll be able to significantly reduce your risk of falling victim to this sort of fraud.
3. Compromising Business Email (BEC)
Business email compromise (BEC) fraud occurs when cybercriminals impersonate company executives or trusted vendors to control employees into transferring funds or confidential information under false pretenses. These scams are disturbingly common, and in accordance with the FBI, they are BEC scams $1.8 billion losses in 2020 alone.
One of the largest BEC scams ever recorded, it targeted tech giants Facebook and Google between 2013 and 2015, causing losses of roughly $121 million. This high-profile scam serves as a stark reminder to all organizations of the threat posed by BEC fraud. So if even big corporations like Facebook and Google could be scammed, it’s a wake-up call for everyone to be vigilant and beware of BEC scams.
BEC fraudsters use a variety of tactics similar to social engineering, email spoofing, and gathering information about organizations to use vulnerabilities. To combat BEC, corporations must employ multiple cybersecurity measures. Implementing email authentication protocols similar to DMARC may help prevent email spoofing and spoofing. Additionally, rigorous procedures to confirm fund transfers can ensure the legality of financial transactions, reducing the risk of falling victim to BEC fraud.
4. Payment fraud
Payment fraud is a major problem that exploits weaknesses in payment systems similar to fake checks, unauthorized transactions and card skimming. If you notice signs of payment fraud, similar to a sudden drop in revenue or strange activity in your accounts, call for close monitoring and motion. To address these threats, corporations need to extend payment security, for example by using encrypted payment solutions and closely monitoring transactions.
The payment fraud numbers are quite alarming. 59% e-commerce corporations have seen an increase in online payment fraud. Check fraud reports almost doubled between 2021 and 2022 reaching 683,541 cases. Identity theft, especially bank card fraud, also continues to be a major problem, with 426,000 cases reported in 2023 alone. Looking ahead, the cost of bank card fraud in the U.S. is expected to succeed in a staggering $165.1 billion over the next decade. These statistics show why taking proactive steps to guard against payment fraud is crucial. Consider partnering with safer payment platforms and moving away from slow traditional methods like checks and bank cards.
5. Impersonation fraud
Impersonation scams are becoming more common and can affect anyone, so it is important to stay vigilant. In 2020, it received the Federal Trade Commission 498,000 reports of these frauds causing losses of $1.2 billion. Scammers often pretend to return from trusted organizations similar to the IRS or banks, hoping to trick you into handing over money or personal information. Scammers use clever tricks to make themselves appear legitimate, similar to threatening legal motion or creating urgent situations.
To protect yourself, be wary of unsolicited requests for money or personal information, especially if they require immediate motion. If you are unsure, please confirm the request yourself using official channels, e.g. by contacting the organization directly.