Three ways that fraud affects your business… and what you can do about it

You came up with an idea. You turned it into a plan. Eventually your spark became the business you’re running today. But as part of your entrepreneurial push, did you consider how to protect what’s yours from people who are intent on illegally taking it from you?

Many business owners don’t worry about being a victim of fraud until the fraud has occurred. By then, you’re potentially out whatever the thieves took, and your peace of mind takes a permanent hit. But there are proactive things you can do to protect yourself and your business, including discussing your unique situation with us. We are available at your convenience and always give you our best insight so you can make well-informed decisions.

Here are three examples of fraud your business might face and some solutions to them:

• Embezzlement – When one person has control over writing checks, handling money and reconciling the books, which is often the case in small businesses, the opportunities to steal money and hide the crime are higher. Often the embezzler will write a valid check to a vendor and a smaller check to himself and code the theft under the vendor’s name. Those small amounts here and there can add up to huge amounts over time.
  Take action: Make sure signing the checks and reconciling the bank account are separate duties, or have an outside accounting firm audit the books periodically or at least annually.

• Check fraud – If you write checks and mail them to your vendors, you’ve given criminals all they need to commit this type of fraud, including your account number and an authorized signature. Forged checks can go through before any reconciliation happens. The longer fraud goes unnoticed, the more likely you could be out that money permanently.
  Take action: Check your statements regularly for any unusual activity or questionable payments. Consider using Positive Pay through our bank. It is a daily review of all checks that will be clearing your account, which allows you to stop the process on any check that looks suspicious before the money leaves your account. With Positive Pay, you can avoid the hassle of having to close accounts or change checks and account numbers. Also consider switching to electronic bill payments. That makes it harder for criminals when there are no physical checks to clone. Shred all checks and bank statements you no longer need.

• Phishing scams – The email looks valid, but it’s an attempt to get you or your employees to send private information or click on links or attachments that will download malware or viruses onto your computer. This can leave your systems and financial and banking information vulnerable to criminals. They might use the information indirectly, finding out enough about you and your business to convince you they’re someone they’re not in trying to scam you in other ways.
  Take action: If an email seems suspicious, don’t click on anything. If it looks like it’s coming from a reputable source, call the person or company sending it to verify its authenticity. Always be skeptical when emails have a lot of misspellings or improper grammar.

Fraud prevention experts established a 10-80-10 rule, which states that 10 percent of the people among any group will never steal, 10 percent are inclined to steal and the other 80 percent could go either way depending on circumstances and opportunity. That applies to your employees, to your customers and the population as a whole.

We never want to think of others we trust as potential threats, but you also never want to be caught unprepared when people you’ve decided to trust do the unthinkable. Remember, the costs of doing nothing can be quite high. So talk to your bank relationship manager and make sure you’re doing all you can to keep your business protected.

We have extensive experience helping owners protect their businesses, and we personalize our recommendations based on how you run your business. We aren’t just delivering a service. We’re here to deliver ongoing peace of mind.

That means we’re always available to answer questions and can discuss options that might assist you with resolving any issues you might face by talking through the problem with you. When you need help, we’re easy to reach, and you can get in touch immediately with an experienced banker.

So don’t wait to think about fraud after the fact – not when the proper tools and a proactive approach can save you time and money while preserving the trust you have for others.