Avoiding Financial Fraud: Tips for Small Business Owners

As a small business owner, one of your top priorities is ensuring that your finances are secure. However, with the increasing sophistication of fraudsters and scammers, financial fraud has become more challenging to identify, making it easier to fall victim to financial scams. In this article, we will discuss financial fraud and scams and how small business owners can protect themselves from them.

Financial Fraud and Scams Explained

Financial fraud occurs when criminals obtain your account or card details and make transactions without your knowledge. On the other hand, financial scams occur when criminals deceive you into making transactions that you believe to be legitimate, but are not. This often involves impersonating someone you trust or an organisation you are familiar with to gain your trust and then deceive you.

Types of Financial Fraud and Scams

There are several types of financial fraud and scams, but we will highlight the most common ones:

1. Authorised push payment (APP) fraud or bank transfer scams: Criminals trick you into transferring money to their account. Common forms of APP fraud include investment scams, charity scams, romance scams, and impersonation scams.
2. Card fraud: Criminals use stolen debit or credit card details to steal your money. This can happen through remote purchase or card not present (CNP) fraud, lost and stolen card fraud, or card ID theft or account takeover (ATO) fraud.
3. Remote support or installation of software fraud: Criminals ask you to download software, usually in the form of a mobile or desktop app, that allows them to gain access to your online or in-app account and transfer money.
4. Delivery fee / Customs fraud: Scammers pretend that a parcel is stuck in customs or that a delivery has failed to persuade you to provide personal information.
5. CEO fraud: Criminals impersonate the CEO or other senior business leaders of your organisation and convince victims to make payments, often stating that they need it urgently.

Protecting Your Business from Financial Fraud and Scams

As a small business owner, it is essential to take measures to protect yourself from financial fraud and scams. Here are some steps you can take:

1. Stay Informed: Keep up-to-date with the latest fraud and scam techniques by regularly checking the news and educating yourself. Being aware of the latest scams and techniques will help you recognise when something is suspicious.
2. Train Your Employees: Make sure your employees are aware of financial fraud and scams and know how to identify them. Provide them with regular training on how to protect your business from fraud and scams.
3. Use Strong Passwords: Use strong passwords and two-factor authentication to secure your accounts. Make sure to change your passwords regularly.
4. Verify Requests for Money: Before making any financial transactions, verify the legitimacy of the request. Call the person or organisation and confirm that the request is genuine.
5. Be Wary of Unsolicited Requests: Be suspicious of any unsolicited emails, calls, or text messages asking for personal or financial information. Do not share your details with anyone you do not know or trust.
6. Use Secure Payment Methods: Only use secure payment methods when making transactions. Avoid using public Wi-Fi or unsecured networks when making financial transactions.

Financial fraud and scams are a growing threat to small business owners. However, by staying informed, educating your employees, using strong passwords, verifying requests for money, being wary of unsolicited requests, and using secure payment methods, you can protect your business from financial fraud and scams. Remember, prevention is better than cure, so take proactive steps to secure your finances today.

Fiskl understands that small businesses need to keep their financial information secure. That’s why we use the highest levels of encryption and information security to ensure your data is always safe. When you connect your bank account to Fiskl, we use bank-grade security protocols to protect your account information. All data that passes between Fiskl and our servers is encrypted using industry-standard TLS (Transport Layer Security) encryption, which is the same level of encryption used by banks and other financial institutions.

Additionally, Fiskl’s servers are hosted in secure data centers with state-of-the-art security measures to prevent unauthorized access. You can rest assured that your financial data is safe with Fiskl.