Fraud is increasing in prevalence and sophistication across all industries, and we must remain vigilant now more than ever. Scammers are trying new ways every day to gain access to sensitive information from businesses.
Three of the most common scams businesses are fighting and need to be vigilant about are:
- Phishing Scams
- Invoice Fraud
- Bank Account Takeovers
Phishing Scams
Phishing is a type of identity theft that involves tricking your employees into giving away company information that can be used for malicious purposes. This often involves creating fake websites, emails, or texts that appear to be from legitimate companies.
Examples of this could include:
- An employee gets an email from one of your company’s vendors asking them to click a link to update your business account.
- A team member receives a text message, appearing to be from you (the business owner), asking them to update their network password via a link.
Before you or your employees click on a link or share any sensitive information:
- Look up the website and phone number for the person or company attempting to contact your staff.
- To take this further, call the legitimate numbers you find and ask if they are trying to reach you.
- Encourage team members and managers to talk to each other in suspicious situations. Talking it out loud might help them determine that the request is a phishing attempt.
The Federal Trade Commission (FTC) encourages businesses to protect themselves from phishing and other scams by backing up their data regularly, keeping security on all technology up to date, educating staff on recent scams and proactive measures, and having a safety net (such as email authentication technology) to help prevent phishing emails from coming through.
Invoice Fraud
One of the leading types of fraud targeting businesses is invoice fraud. On average, invoice fraud costs U.S. companies $280,000 annually.
Invoice fraud involves sending fake invoices, often with convincing documentation, to trick your business into making an unauthorized payment. Fraudsters will take steps to appear as trusted vendors.
As a business, it is essential to watch for these red flags:
- Changes in payment instructions from vendors
- Urgent requests that seem unusual
- Discrepancies on invoices
- Unusual or strange formatting on invoices
To be successful, these fraudsters take advantage of weaknesses in a business’s accounts payable practices. Educating yourself and your employees on recognizing these scams and implementing preventive measures is imperative to safeguard your business from invoice fraud. When in doubt, pick up the phone and call your vendor directly at a trusted number. You are your strongest advocate!
Bank Account Takeovers
A bank account takeover occurs when cyber criminals gain control of a company’s bank account by stealing the business’s online banking credentials. Most commonly, this involves malware a fraudster has installed on a business computer, which either allows them access to the credentials or allows them to initiate an online banking session and impersonate an employee or owner.
With this type of scam, criminals tend to target small-to-medium-sized businesses (as opposed to larger companies) because small businesses often do not have the same level of resources to defend themselves and cannot monitor accounts as frequently due to having a smaller staff.
Here are some best practices to prevent cyber criminals from accessing your most vulnerable company information:
- Use a dedicated computer and workstation for all financial transactions.
- Ensure anti-virus, malware, and spyware software is installed and working.
- Have your IT administrator implement multi-layered system security technology. The more barriers you can create between your network and an attacker, the better.
At Members 1st Federal Credit Union, we are committed to protecting your business from fraud and better-equipping organizations with ways to avoid becoming victims.
If you have any questions or concerns about fraud, we have resources available on our website and encourage you to call or visit us in person at one of our nearly 60 local branches across the region. We are here to help!
