What Business Owners Can Do to Prevent Online Fraud

Working in the online environment hides numerous traps. You can never tell where and when your bank accounts, financial reports or email addresses will be ambushed by online fraudsters and hackers. These people are extremely intelligent. They know how to break some cutting-edge security systems and get what they want.

Those tricksters are developing their cunning plans as we speak, so as to grab the assets of hard-working online entrepreneurs. While the most prone to online fraud are business accounts and credit card numbers, they can manipulate online businesses in many other ways.

This is why you should leave no stone unturned when you’re preparing protection features for your online business.

The big and the small under attack

Modern hackers will devour any kind of business, no matter how small or big it is. For instance, the Rokenbok Education toy business from California was hacked in 2015. What the hackers did was encrypt the company online files and asked for a ransom.

On the one side, this business lost money due to a downtime caused by the hacker attack. On the other, they had to spend their assets and pay the hackers to unlock their data. On top of that, this company is truly a small business – they have only seven employees.

So, there’s no difference between small prey and big prey. When the predator spots a weak spot, they don’t mind whether you’re Coca-Cola or a local shoemaker from Kentucky. Therefore, don’t ever think you’re safe only because you’re small.

Introduce strict netiquette from the beginning

Needless to say, hackers are smart guys. However, they can hardly do anything, unless you give them something they can work with – a kind of Sherlock Holmes smart – they’re perfect at following clues.

If your employees fail to follow the security rules, they will literally let the intruder inside your business. As a matter of fact, a report made by IBM shows that 60% of fraud perpetrators are company insiders. What’s even worse, only one-quarter of those online raids is made unintentionally.

In order to prevent that, you have to introduce some serious rules and a detailed security drill. Every new employee on your payroll needs to pass that drill.

  • Email policy – When they receive a new email with any additional features, your employees should scan the attachments before they download them. Also, if the sender isn’t on your mailing list, don’t open the email in the first place.
  • Social media private chats – Your employees mustn’t share any confidential business information in social media. While not sharing such data in posts goes without saying, they should be warned not to chat about the company affairs, as well, even if they’re both your employees.
  • Social media business page – Business owners are often taught that there’s no better way to promote their business than a social media page. It’s definitely true unless your business social media account gets hacked. If it happened to Mark Zuckerberg, it can happen to anyone. So, your business page operator needs to be someone who you trust more than you trust yourself. Also, the password and the authentication procedure is something you have to manage only with that person.
  • Logout obligation – Every worker needs to log out at the end of the work day from all the software and online tools they use. What’s more, they shouldn’t check their private emails on the company computers. Today everybody has a smartphone and they’re always online, so there’s no need to expose the business equipment and data to any risks of that kind.

Beware of the public Wi-Fi

Now that we’ve sorted out some in-house security basics, we have a more difficult task before us – keeping your business safe outside. You can often hear parents whose kids have done something against the law saying that they raised them by the book. It was their friends who talked them into doing wrong things.

This can happen to any business owner – you train your employees how to behave safely and they follow your rules as long as they’re within the company. The moment they go to a business conference in Los Angeles, they get relaxed and forget all about the business security. This is why you need to give them some instructions before they leave.

  • Turn on the firewall – Both Windows and iOS have pretty valuable and easily set firewalls. The users of the former should just go to Control Panel, then choose the option System and Security and voila – there’s the firewall. As for the latter, you’ll find it in System Preferences, i.e. its Security & Privacy subcategory.
  • Don’t share the network – When on a public network, your employees should deactivate any sharing options. If your workers aren’t skillful with those advanced features, let your IT-pundits teach them how to adjust those settings.
  • Never switch off your antivirus – No matter if it’s a legally acquired video game or software of a different origin, they should never switch off the antivirus, even if a program asks them to do so. The same goes for the firewall.

Those guidelines on public Wi-Fi should be applied whenever your workers aren’t connected to your trusted home or office network. Even if it’s a hotel network with a password protection, there should be no exception for proper business protection.

 

Add new layers of payment security

Business owners should never put all eggs in one basket. While this strategy refers equally to every single action you perform, it does have a little bit more to do with the financial aspect of the business. According to research

According to research performed by Ponemon Institute, about 110 million Americans were hacked in 2014. And when we say hacked, we mean names, credit card numbers, email addresses, passwords – in a nutshell, everything that can reveal any information about their identity. The total number of online accounts (banks, social media, email addresses) hacked on that occasion reached about 430 million. Since everybody can become a target of online tricksters, you need to shelter your finances and your clients with several layers of protection.

For instance, if your online venture is also an E-commerce business, you should incorporate a cutting-edge payment system in your website. Since building a custom-made solution for this purpose is too expensive, you can use WordPress and one of its payment plugins.

There are many free plugins, but this shouldn’t be the most important factor when making those decisions. If you save on crucial business features, you might have nothing left to save from, in a case of online fraud.

Nevertheless, if those solutions don’t seem to meet your security demands, seek out more advanced solutions, such as Stripe or PayPal.

Conceal the prototypes and the production process

Cybercriminals don’t only want credit card numbers and personal information about clients of different companies. They’re also very keen on stealing potentially lucrative business ideas, as well. Although this sounds like a more complex game, played only by large companies, you can never tell how big a product your employees have just come up with.

The smartest thing you can do when you coin a business idea is to register your patent or your trademark and protect your intellectual property. What you shouldn’t do is upload that solution to your cloud account and let it stay there. First and foremost, you can‘t tell if an insider will try to reveal it to someone else.

Apart from that, this data won’t be safe unless it’s protected with several layers. The most of the cloud providers offer enhanced online security, but you should also do your share of work and encrypt your data before you send them to your cloud account. However, don’t use the same passwords you use for your payment accounts or software tools. Also, if it’s possible to assign different employees to manage those features, it would be great. The reason for such a cautious data preservation policy is pretty simple – if one employee has access to all the vital data about your products and prototypes, they will be under too much stress and, dare we say, temptation.

As opposed to that, when this responsibility is distributed to several workers, the risk of human error is much lower.

Double-check your clients and partners

The Internet gives people a chance to present themselves in many false ways. We’ve all heard dozens of stories when two people meet online, go out on a date and nothing turns out to be as it was presented. The toll taken by faking in online love affairs is a broken heart.

However, the result of online business faking is going broke or even getting a heart stroke. The worst of all is that sometimes you can actually receive a letter from an email address that belongs to a distinguished company. Due to so many advanced technological features available to hackers, they can introduce themselves with somebody else’s identity (identity theft). If you’re only a tiny bit gullible, you’ll fall for it. In return, it might bring your business to an end.

This is why you should have a security checklist when a new company contacts your business.

  • Observe the email – There are many scammers who don’t even try. They just send out an email from a fake email address (also known as phishing) and hope someone will take the bait. So, first see if the address is fake.
  • Visit the website – This will tell you a lot about that business. Of course, sophisticated hackers can fake everything, but your common sense will bring a valid judgment when you take a look at the website. If there’s no website, your little case is closed.
  • Do background research – If the address is valid and the website seems fine, but you still have some doubts, do some Web research on the company’s name. Check their LinkedIn profile, their connections, and their portfolio. You may also use a DNS tool to find more information about the original website registrant. Don’t hesitate to contact the businesses they cited on this network as their collaborators and ask them about their experience with that company.
  • Direct calling – When you’ve run out of smooth online tools for multi-checking a suspicious potential client, turn to traditional methods – call them on the phone. Find their telephone number on their website and phone them through a VoIP software solution (if they’re abroad). Inquire about their business plans and the offer they’ve sent you. This will give you a better insight into their intentions.

Avoid (un)reliable outsourcers

When you run an online business properly, it’s highly likely it will thrive, leading to greater need for new staff members. And if you accept the current online trends, you won’t hire too many in-house temporary workers, but you’ll try to find some staff members online.

While this might be a smart thing to do, due to lower hourly rates and a variety of exceptional freelancers, it could also lead to some negative outcomes. The essential dilemma here is whether to hire a less experienced freelancer with lower rates, or an expensive expert. This choice will entirely depend on your budget and your business needs.

However, one principle fits every decision you make – they should have only limited access to your business documentation. Hence, don’t let them access your accounting papers and payment accounts. Moreover, they shouldn’t be allowed access to clients’ email addresses and confidential business plans.

If you really want to keep your business safe from online scams, outsourcers will be informed only on their tasks and nothing more. Only when they’ve worked with you for years should they be given more insight into your business operations.

With so many online dangers waiting for us to make a mistake, you might ask yourself why to bother in the first place. Simply put, the Internet offers so many opportunities for business success that those risks can’t compete with the potentials of the Web. However, it’s vital that every business owner takes their online enterprise seriously and make sure they get proper protection from online perpetrators.

Mark Thomasson
Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.
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