Have you or your business fallen victim to fraud? In 2020, the Federal Trade Commission reported a 47% increase in reports about problems consumers (including small business owners) face in the marketplace, such as identity theft, scams, or issues with online shopping. Of the 4.7 million reports filed in 2020, 2.2 million were specific to fraud (up from 1.7 million in 2019). In 34% of the cases, the consumer reported a loss, amounting to $3.4 billion in total fraud losses!
Fraudsters can be really resourceful. They often pretend to be someone you trust and create a sense of urgency to act. Three common scenarios in the small business marketplace are 1) businesses’ computer or phone is compromised, 2) a business signer is impersonated, or 3) businesses’ checks are stolen.
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Here is an example of how a fraudster might compromise your business email to commit fraud. Someone emails your accountant (internal or external) or another employee at your company impersonating you or another high-level executive at your company, such as a co-founder or president. In reality, the sender is an imposter. Usually, these emails request a money transfer to a specified account, often via wire transfer. The wire is sent and voila, a fraudster has your funds, and it is often either difficult or not possible to recover those funds.
But there are things that you can do to keep the fraudsters at bay. Here are some tips that you can use to protect yourself from these crafty criminals.
1. Be Tech Savvy
Make sure that you and your employees keep your passwords, files, and financial information safe and secure. Fraudsters often try to trick you into sharing your password or clicking a link that will give them access to your device. Fraudsters may then call, text or email you to obtain the temporary access code that your financial institution has sent to your trusted device. Before clicking a link or entering a password on a website, make sure that you trust that it is legitimate by looking out for red flags like typos in the email or web address or an usual request from a known client or supplier. Financial institutions typically never call, text or email you asking for your temporary access code. Fraudsters can also try to get you or your employees to give out sensitive information over the phone. Be very leery of requests to provide passwords or financial information over the phone and never give your temporary access code to anyone over the phone, in response to a text or email request, even if the caller claims to be calling from a government agency or a trusted vendor.
2. Educate Yourself and Your Employees
Make sure that you and your employees are knowledgeable about common scams and how to protect against them. The Federal Trade Commission’s website is a great source for the latest information (Scams and Your Small Business: A Guide for Business | Federal Trade Commission (ftc.gov)).
If you do suspect fraud on your accounts, it is critical that you promptly take the following steps to protect your accounts:
• Contact your bank or financial institution to safeguard your accounts
• Contact local police or your local FBI office to report the fraud
• Notify your employees so everyone can participate in protecting your business and identifying the fraudsters
• Upgrade your cybersecurity protocols (the Federal Trade Commission (FTC), Small Business Administration (SBA), and FBI offer helpful guidelines)
3. Take Advantage of Tools Your Bank Offers
Take full advantage of tools that your bank can offer to help you monitor your accounts and proactively detect unusual activity. Here are some of the tools that we offer at Wells Fargo for protecting your own account information and business:
• Use alerts to help you detect fraud. You can set up alerts to be notified when anyone makes a purchase or withdrawal on your business accounts. If something doesn’t seem right, contact your financial institution right away.
• Manage data sharing through Control Tower. Control Tower provides simple, secure, and centralized access to your Wells Fargo cards and account information, allowing you to easily view, manage, and monitor your digital financial footprint. You can turn card on or off, view recurring payments, and monitor data sharing by selecting which Wells Fargo accounts and statements you’d like to share with eligible third-party financial services.
• Manage access to your accounts using Account Access Manager. Whether it’s an employee, a bookkeeper, or an accountant, you can review who has access to your business accounts and remove access when needed.
• For larger businesses, take advantage of treasury management to access advanced tools to review and decision transactions, manage and control access to accounts, and set up dual control workflow.
It can take time to change your habits to diligently search for and help protect yourself and your company against potential scams, but with these resources at your fingertips, you can be well-armed in the fight against fraud.
Ann Marie Lynch is Deposit & Payments Executive for Wells Fargo.
