Fraud: protecting your customers and your business

Every small New Zealand enterprise that trades online is inadvertently in the fraud-prevention business. Whether it’s an online transaction using a stolen credit card, viruses hitchhiking on your emails or a hacked database, fraud is often costly and annoying. It can also destroy your customers’ faith in your systems and cause you to lose business.

Many years ago SME had a new server installed and the company which did the installation left it without a password overnight. The next morning the entire system was shut down because spammers had hacked the server and were using it to send out millions of emails all over the globe. It’s easy to think fraudsters won’t target your business, but small businesses are often more attractive because they don’t always have the right fraud-prevention measures in place.

Here are some tips for preventing fraud occurring in your company:

·       Keep your firewalls and antivirus software up to date on all your devices. If you have your desktop computer thoroughly protected but your linked tablet is wide open, you’re still running a risk.

·       Use reputable and well-protected cloud-based software that has a clear policy for protecting your data and your clients’ data.

·       Help your staff members choose strong passwords and change them regularly – not ‘123456’ or ‘password’ or ‘qwerty’ or any of the other most popular passwords.

·       Look for suspicious online transactions. These include outlying high-value orders, especially with rush delivery, as well as uncharacteristic behaviour from existing clients (someone who orders a $20 product twice a year suddenly orders $6,000 in your most expensive items). Also look for missing information, different shipping and billing addresses, and local credit cards but overseas customers. It usually only takes a quick email or phone call to verify the details and establish whether the order is legitimate.

·       Be careful about who has access to company accounts. Sadly, employee fraud is the most common and often the most malicious type of fraud. Do a background check on anyone who will be able to move money around within your business.

·       Have a written data handling process. This should set out who has access to information and at what level, how it is kept secure and how clients’ privacy is protected. Confidentiality agreements are vital for the people who are able to see this information.

This is the tip of the fraud-prevention iceberg, but hopefully it will give you something to think about. A small outlay up front to protect your business can prevent an expensive loss in the future.

By Shrina Kaya