A Business Guide to Scam & Fraud Prevention
Building a thriving business requires juggling multiple tasks and demands at once. Modern fraudsters attempt to target the busyness of day-to-day operations with deceptive account tactics that are easy to overlook, like fake invoices. Fortunately, by understanding how these thieves work, you can get ahead of their tactics and prevent business banking fraud.
Common Types of Business Fraud Tactics
From small sole proprietorships to large, corporate enterprises, companies typically have a consistent flow of accounts receivables and payables. These steady movements are a prime target for fraudsters looking to prey on businesses.
Invoice Fraud
A common risk is thieves posing as legitimate companies and sending invoices for goods or services that the business never received. In some cases, the bill may utilize a new company name in an industry that the recipient regularly utilizes, preventing it from standing out. Alternatively, the fraudsters may choose to identify as a well-known brand that elicits trust, such as Best Buy or PayPal.
When slipping under the radar isn’t effective, the fraudsters move on to scare tactics. For example, they may follow up a fake invoice with a late payment notice, threatening additional fees and even legal action if not paid immediately. Such a warning can cause significant fear, leading to businesses paying the fake amount and losing money.
Phishing Scams
Phishing has become a top choice for fraudsters, resulting in over $52 million in losses each year. With email phishing, the scammers send emails that appear to be from legitimate sources, such as your bank. They often use enticing tactics, like special offers, or fear-based requests, such as verifying an account change that wasn’t made.
When you click a link, it takes you to a fraudulent page that mimics the real website, requesting log-in details. These cybercriminals then use your credentials to transfer funds to an outside account. They can also send out invoices to your clients posing as your business. When unsuspecting customers pay, the fraudsters reroute the funds to themselves.
5 Strategies to Prevent Business Banking Fraud
Fraudsters can access email and other contact details through a variety of methods, including harvesting software and third-party databases. Additionally, addresses for paper invoices are easily obtained through local business records. For these reasons, it’s challenging for businesses to avoid phishing attempts completely. However, you can stay a step ahead with a few strategic processes.
1. Track Vendors
Staying aware of the people and companies your business works with limits a cybercriminal’s options. As such, create a complete database of all the vendors you work with, along with contact information and an overview of what they provide to your team. Anytime a bill comes in that you don’t recognize, check to make sure the company is on the list.
2. Verify Invoices
When invoices do come in from familiar operations, always check that the bill is authentic. Avoid replying to the email or using the contact details provided. Instead, visit the company website or use the phone number you have on file to reach out to the brand and verify that the bill is real. Check with your team as well to make sure the services and products — and the accompanying amount — are correct and haven’t been paid already.
3. Monitor Finances Closely
Tracking movements of funds is an excellent way to spot discrepancies. Check all business banking accounts on a daily basis, and complete audits regularly to ensure that all transactions line up correctly. Additionally, set digital banking monitoring alerts to ensure unusual activity gets your attention immediately.
4. Train Staff
Our digital banking features allow businesses to add sub-users so that necessary individuals within your company can complete mandated tasks. While individual permissions can be set, it’s important to limit the number of users to reduce risk.
For those that do have access, make sure they’re properly trained on what to look out for, like transactions into or out of dormant accounts. All employees also need education on common email phishing tactics and their signs, such as spelling errors and odd formatting.
5. Stay Skeptical
In the digital age, fraudsters evolve their tactics incredibly quickly. As such, keeping your business secure requires always double-checking any incident that seems out of the ordinary. If unsure, reach out to your business banking team for a more in-depth review before approving any movement of money.
A Fraud Prevention Checklist for Business Banking Clients
☑ Enable Security Features
When logging on to digital banking for the first time, make sure to add your phone number and preferred contact method to receive your secure access code for multi-factor authentication.
☑ Keep Contact Information Up to Date
Let us get in touch quickly if we detect suspicious banking activity by regularly checking and updating your contact details.
☑ Set Up Alerts
Create custom alerts for each business account to catch unusual behavior as soon as it happens.
☑ Limit Digital Banking Access
Only select trustworthy individuals to have direct access, if necessary, and be sure to personalize their permissions based on the specific needs of their role.
☑ Create Internal Procedures
Prioritize fraud prevention training and education for the whole team, and put procedures in place to follow in the event suspicious activity does occur.
Rely on Secure Business Banking Services in Mid-Missouri
Successful fraud prevention begins with secure business banking services. At The Callaway Bank, we’re dedicated to keeping our clients protected across Columbia, Fulton, and surrounding areas throughout mid-Missouri. Our state-of-the-art fraud monitoring system automatically generates alerts for suspicious transactions. We also utilize a variety of enhanced security features for our digital banking services, including firewalls, multi-factor authentication, and encryption.
Enjoy the peace of mind of our secure banking services by reaching out to our Business Banking Team today!
Contact The Business Banking Team
What Is the Beneficial Owner Information Report? 
These additional funds may go on to help grow small businesses, which increases job opportunities and brings even more money into the community. They can also attract desirable residents and assist with improvement projects, like sidewalk maintenance and park updates. As a result, keeping your hard-earned cash local can end up helping provide a higher quality of life for your family.
