Take Steps to Protect Your Business from Fraud
Becoming the victim of fraud is one of the worst things that can happen to a company. First, you experience the loss of income from the fraud. Then, there’s the ongoing headache of rectifying the illegal activity, such as changing bank accounts. Also, depending on the kind of fraud and the type of company you have, you may have to work hard to earn back the public’s trust.
There are numerous types of fraud that can affect a business. I’d like to touch on a few of the common ones and discuss ways you can help protect yourself from becoming a victim.
Credit Card Fraud
According to Barclays, 47 percent of credit card fraud occurs right here in the United States. That means you have to constantly be on guard against this type of fraud. One way to combat credit card fraud is to be sure your business accepts EMV, or chip, cards. These cards make it extremely difficult for criminals to counterfeit since the embedded computer chip creates a unique transaction code for each transaction. If you still don’t accept EMV cards, it’s time to upgrade your credit card terminals. If not, you can be held liable for any fraudulent transactions made using the magnetic strip, instead of an EMV transaction.
Obviously, you can’t use the EMV technology with someone making a purchase through your online store, but there are safeguards you can employ to reduce the chance of fraud. First, collect as much information as you can from the card – full name on the card, card number, and expiration date. You should also require the three-digit CVV code to complete the transaction for added security.
We often think of fraud as someone outside the company trying to cheat you out of money, but sometimes the fraud occurs internally. This can be particularly devastating since you may feel betrayed by a person you put great trust in. One way to combat fraud within your company is to have distinct separation of duties for employees. For instance, you would not want one person to be in charge of both accounting and auditing for your business.
One of the best ways to detect potential fraud is to provide fraud prevention training for your employees. The training can include instructions on using EMV technology, identifying counterfeit checks and credit cards, and an anonymous reporting system to alert you to fraud. With this type of training, your employees can be your best defense against both internal and external fraud.
No one wants to become a target of fraud. With the right mix of technology and training, you can reduce your risk of becoming a victim.