Keeping a Watchful Eye on Fraud During the Holidays
As businesses prepare for a busy holiday season, with increased customers, sales and especially e-commerce transactions, it’s important to keep fraud risk in mind. Fraud can be especially crippling for small businesses. According to the Association of Certified Fraud Examiners (ACFE) Report to the Nations 2018 Global Study on Occupational Fraud and Abuse, fraud accounted for $7 billion in total losses for businesses worldwide.
Family-type environments and less checks and balances make small businesses more vulnerable to fraud and identity theft, especially during the holidays. The ACFE found that 29 percent of fraud cases occurred in small businesses with less than 100 employees. Median losses from those cases were estimated at $200,000.
Small businesses face different risks than larger organizations. Corruption, followed by billing schemes, make up the largest percentage of fraud, and the median duration of a fraud scheme is 16 months. Tips are the most common initial detection method for fraud, while data monitoring and surprise audits were correlated with the largest reductions in fraud loss and duration.
Some red flags to look for when it comes to fraud committed by an employee are living beyond their means, financial difficulties, unusually close association with a vendor or customer, control issues and an unwillingness to share duties, divorce/family problems, and a “wheeler-dealer” attitude.
Other types of fraud can include those involving goods and supplies, accounting, workers compensation claims, fictitious vendors, customers writing bad checks or returning items not purchased from your business, and electronic hacking and scams.
The IRS recommends always using security software with firewall and anti-virus protections; using strong passwords; and learning to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card companies and even the IRS itself.
In 2017, e-commerce fraud between Thanksgiving and Dec. 31 rose by more than 30 percent, according to a study by ACI Worldwide. There are plenty of steps businesses can take to prepare and protect themselves during the busy holiday season. It’s also never a bad time to put anti-fraud measures in place to help protect your business year-round.
strattera no prescription Plan for the holiday rush
If you’re an established small business, you should have some idea of how busy things get during the holidays. Do you have to hire extra staff, stock more inventory or offer additional services? If so, these will take extra preparation and planning so that your customer service isn’t interrupted. Making sure that everyone in your organization is involved in planning and aware of promotions can help things run smoothly.
buy prednisone overnight delivery Know what types of fraud to look for
Is your business mainly online or do your customers pay often by check? Is your return policy clear? Examining areas where fraud can occur and putting measures in place for prevention will lessen the risk of your business being targeted. Also, remember that fraud occurs internally more often than not in small businesses, so keep an eye out for red flags and encourage employees to report fraud if they see or suspect it.
Test your systems & security
Can your website handle increased traffic, and are your payment options secure? Businesses have a certain responsibility to protect their customers, along with themselves, from fraud and identity theft. Talk to your web hosting company and make it aware of the possibility of higher holiday traffic. Merchant service providers like Square and Paypal follow industry requirements for data security and make it easy and also safe for your customers to pay.
Practice good customer service
While heightened awareness is necessary for detecting fraud, you don’t want to make customers feel like they’re under surveillance either. Your customer service strategy should not change as you watch for and combat fraud in your business. According to Sift Science’s Fraud-Fighting Trends 2017, 72 percent of businesses are concerned about preventing fraud without turning away good customers. If a customer is flagged as fraudulent, treat them with respect and reassure them that you are just trying to protect them and their transaction.
Put fraud prevention methods in place
Sift Science’s trends estimate that 91 percent of businesses plan to spend the same or more on preventing fraud and abuse. Putting some extra time and money into fraud prevention can pay off in a big way later. Continuous auditing and monitoring can help catch inconsistencies and encouraging anonymous tips from employees has been proven to reduce loss.
MidSouth Bank offers the EZShield Business Protection Program with an all-encompassing “secure, monitor, restore” approach to protecting you and your business’s sensitive information and finances. On-the-go access, password protection, daily internet monitoring, fraud alerts and discounted identity protection services for employees make up the benefits of this award-winning protection service. Customers can ALWAYS report any suspicious communication or transactions to MidSouth Bank by calling 1-800-213-BANK. Visit MidSouthBank.com or EZShield for more information.
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