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What is a business scam and how to prevent it?

Managed services 02/27/2021 - 02:30 by Swami Nathan

Five Tips to Prevent Business Fraud

Organizations of all types and sizes will fall prey to a scam – from the smallest company to the largest multi-national corporation. Scams can adversely impact the financial health of any business, its image, and its credibility.

What is a Business Scam?

A scam is a fraudulent scheme that seeks to get money, or something else of value, from its victims.

Many well-known scams are aimed at private individuals or users, but various scams also target businesses. All sizes and forms of companies may be vulnerable to scams. The damages to individual victims vary from tens of pounds to millions.

When a business is very aware of its security flaws and vulnerabilities and can recognize fraud, it can minimize the chances of becoming bait.

How can you prevent your business from being scammed?

A new study by the UK government found that the scale of cybersecurity threats has not diminished and that cyberattacks have progressed and become more frequent.

The report showed that almost half of companies (46 percent) report having cybersecurity breaches or attacks in the last 12 months. Businesses are beginning to take action, 64 percent have taken at least one action to recognize cybersecurity threats.

However, there is still one-third of UK businesses that are not taking any steps with their Cybersecurity and that is risky. Especially when there are some very simple steps you can take to protect your business.

One of the greatest wins your company can have is by educating your employees. 88% of data breaches in the UK are due to human error. So, by having your staff trained and informed about their role in Cybersecurity you can help boost your overall cybersecurity.

To help we have put together a few easy-to-follow tips that will help your staff better protect your company.

Five tips to avoid business scam

1. Safeguard the computer devices

Hackers are experts at breaching computer networks. A sturdy firewall can help protect your company records, while antivirus software can help detect breaches early on. There are many well-regarded cyber-security vendors. Settle for the apt product that works best for your demands.

Set up strict protocols that enable workers to build passwords that are difficult to decode. Make employees change their passwords every 60–90 days and set password criteria to help ensure they produce strong passwords.

Try backing up your files on a regular or weekly basis and store them offsite. If anything happens to your setup, you'll be able to recover the files you need without much downtime.

2. Know your clients and suppliers

When you understand who you do business with you can spot any business request or transaction that looks wrong for that client or supplier and could be fraudulent.

Conduct due diligence using a risk-based strategy, such as reviewing the client or supplier information you have on paper, as well as online searches.

3. Conduct employee background investigation

When expanding the workforce, it's important to find people who are not only skilled but who are also trustworthy. Don’t depend solely on references and work history. Conduct a detailed background check.

Some companies will offer this service to you. Most charge between $30–$50 per study. When you narrow down a list of potential hires to one or two candidates, you will run a search on the finalists before making your final decision. Please ensure you obtain the appropriate permission to run the check.

4. Evaluate All Online Demands — Especially Urgent Ones

Some businesses are so eager to please stakeholders, that they rush to satisfy any possible need without examining the possibility that it is fraudulent. It is important for companies to carefully assess any online requests that seem legitimate, particularly if the sender expresses exceptional urgency.

By emphasizing dire consequences, such as account closures or fines that could occur if people don't act immediately, many cybercriminals try to make victims fall for their tactics. Fraudulent situations such as these capitalize on anxiety. Before making any sudden decisions that could disrupt company operations, it is best to get advice from a lawyer or cybersecurity expert.

5. Create an action plan

Consider whether you may need clinical or legal advice. Although prevention is better than cure, you and your company need to be prepared for the worst. Getting an action plan in place will help limit the losses to fraud.

Conclusion

All companies will potentially be vulnerable to online fraud attempts. Fortunately, understanding goes a long way toward helping companies pick up on possible characteristics of fraud and realize how best to fight back.

To help you understand how well your company is secured, we have provided a free IT Audit that will analyze your entire infrastructure. For more information on the IT, audit click here, contact info@teceze.com, or call us at +44 20 4551 2020.

Organizations of all types and sizes will fall prey to a scam – from the smallest company to the largest multi-national corporation. Scams can adversely impact financial health.