Fraud Help

Protecting Your Small Business

You work hard to grow your business, nurture customer relationships and ensure a stable future for your employees. Unfortunately, small businesses are prime targets for scammers because they often lack the extensive security protocols of larger companies.

The financial impact of scams on small businesses can be devastating. Unlike larger companies, small businesses may not have the resources or dedicated departments to detect and combat fraud. Falling victim to a scam could bring significant financial loss, disruption of business operations and damage to your reputation with customers, suppliers and other stakeholders. Protecting your small business from scams is crucial for ensuring both its short-term stability and long-term success.

Common Scams Targeting Small Business

Here are some of the most common scams that small business owners need to watch out for:

• Phishing Emails. Phishing is a scam where fraudsters use email to impersonate legitimate entities, such as banks, vendors or government agencies, to trick you into providing sensitive information. These emails often look convincing and may contain fake invoices, tax notices or urgent requests for payment. Once the scammers gain access to your account credentials, they can steal money, valuable business data or even infect your system with malicious software (malware).
• Fake Invoices and Overpayment Scams. In fake invoice scams, scammers send fraudulent invoices to your business for products or services you never ordered or received. They count on your busy schedule to pay the invoice without verifying its authenticity. Overpayment scams involve fraudsters sending a check for more than the agreed-upon amount, then asking you to refund the difference. The original check will bounce, leaving you with a financial loss.
• Business Identity Theft. Business identity theft occurs when scammers steal your business's identity, including tax information and business registration numbers, to open lines of credit, apply for loans or commit other forms of financial fraud in your business's name. This can lead to serious financial problems and legal disputes, as the fraudulent activities may be attributed to your business.
• Tech Support Scams. In tech support scams, scammers pose as IT professionals or service providers and claim that there is a problem with your company's computers or software. They convince you to provide remote access to your system or charge you for unnecessary repairs. This scam can result in stolen data, malware infections or unauthorized charges to your business.
• Directory Listing and Advertising Scams. In this scam, fraudsters pose as directory or advertising companies, offering to list your business in an online directory or place advertisements. After your payment, however, you receive little to no service. These scammers often use high-pressure tactics to push businesses into paying for services they don’t need.
• Vendor Compromises. Another common tactic for fraudsters is to compromise vendor email accounts and then use that account to pose as the vendor in order to trick you into changing payment details. Your payment is then sent to the fraudster rather than your vendor.

Tips For Protecting Your Small Business

• Educate Your Employees. Your employees are your first line of defense. Regularly train your staff on how to identify phishing emails, suspicious invoices and other common scams. Teach them to verify the legitimacy of any unfamiliar requests before taking action. Having a clear process for flagging and reporting potential scams within your organization can prevent errors and keep everyone vigilant.

• Implement Strong Cybersecurity Measures. In today’s digital landscape, cybersecurity is essential for protecting your business from scams. Establish a robust security awareness program that includes regular testing and compliance.

• Verify Invoices and Payments. Create a process for verifying all incoming invoices before making payments. Ensure that multiple employees review large transactions and that invoices match actual goods or services received. For overpayment scams, never refund overpayments without verifying that the original payment has cleared your account.

• Monitor Your Business Credit. Keep an eye on your business credit report to detect any unauthorized activity, such as new credit lines or loans opened in your business’ name. Sign up for alerts with credit reporting agencies to be notified if anything suspicious arises. Early detection can help mitigate the damage caused by business identity theft.

• Be Skeptical of Unsolicited Offers. Always be cautious of unsolicited offers for business services, especially those that come with high-pressure sales tactics. Before committing to any directory listing, advertising or service contracts, thoroughly research the provider and verify their legitimacy.

• Leverage Vendor Relationships. Because fraudsters often pose as vendors to lure you into sharing bank account credentials, you should always leverage the relationships you’ve built with vendors by verifying the legitimacy of their requests over the phone.

While scams can be difficult to avoid entirely, these proactive tips can help you protect your small business from common threats.

Email Fraud: A Small Business Survival Guide

Email fraud is one of the most common ways scammers attack a business. While you may think your business isn’t a target, email fraud targets businesses of all sizes from large corporations and hospitals to school systems and “Mom & Pop” shops. Here are a few ways to spot the telltale signs of a fraudulent email, and what to do to help keep your business safe.

Common ways business email can be compromised:

The Situation

Email scammers use a seemingly harmless email to introduce malware (malicious software) into your computer via a link or an attachment. This malware encompasses any number of codes written to “hack” into your business’s computers or network. Once it’s in, the malware can spread to other computers on your business network or to your servers. The specific type of software depends on what the hackers are trying to accomplish. For example, they may introduce a program that records every key you press. These keystroke loggers can capture banking transactions or record all of your usernames and passwords.

How Can This Attack Be Prevented?

If you receive an email containing a link or an attachment – slow down. Especially if it’s an email from an unknown source. Take the time to see if the sender is legitimate. Check the sender’s email address. Look for spelling or grammatical errors or inconsistencies throughout the email. NEVER open attachments or click on links in an unsolicited email that you can’t verify. If the email “seems” to be from someone you know, but something seems off – call the person directly to verify.

The Situation

Email hackers can also attack your business by posing as a company with which you do business. Once they have access to one of your vendor’s systems, they may hack the vendor’s email accounts or create accounts that look like your vendor’s. From there, they might send you a seemingly official email. These emails often ask that you send your regular wire payment to a new bank account and routing number.

How Can This Attack Be Prevented?

You may receive emails from vendors every day requesting you to transfer funds or wire money.  However, if one of your vendors has been compromised and it’s actually a hacker sending an email disguised as your vendor, chances are they will have an unusual request for sending money. If they are asking you to wire or transfer funds to a different account with a different address – STOP! Call the vendor directly to verify the request first. Avoid using any phone number provided on the email. Be sure to get it from a trusted source instead.

Email is key to conducting business successfully. It’s important to be aware of the signs of fraud. Help prevent a disaster by slowing down, assessing the situation, and taking the time to verify.

Check Fraud and Positive Pay

Check fraud remains an ongoing concern for business owners. WSB offers a solution to help you prevent check fraud called Positive Pay. This service is FREE of charge and available to WSB business customers only. It works by comparing the details of checks presented for payment against a list of checks the business has issued, flagging any discrepancies for review. This helps identify and prevent fraudulent checks from being cashed. 

How does Positive Pay work?     Learn more about Positive Pay

As a business customer with Positive Pay, you simply upload a CSV or text file each day, through your WSB Digital Banking, listing all the checks you have issued and authorized including the check amount and check number for each item. You also have the option of manually keying issued items directly into your digital banking. When a check is presented for payment, Positive Pay compares each check against your check issue file. If a check is not in your issued items list or if the check numbers and/or amounts don’t match, the check will be denied for payment at that time. Instant daily fraud protection.