Common Tricks Fraudsters Will Use To Take Your Money

In business, making money and saving it in terms of controlling expenses is enough of a challenge without then losing some to fraudsters. Sadly, fraud is a common problem for businesses of all types and sizes. As technology is embraced by more businesses this in itself has given rise to increased fraud threats through potential security vulnerabilities, so it’s a risk that all businesses need to take seriously. While some frauds can be quite elaborate, others are fairly basic but can be foiled through vigilance and using appropriate tech and systems. For example, someone trying to forge or tamper with a check can be stopped through the use of modern tamper proof check stationery as part of the accounting admin system. There are various fraudulent activities to beware of in business:

Forged cash

If your business handles cash payments, then fake currency is a threat. According to the United States Department of Treasury, some $70 million fake bills are in circulation. Helping cash handling staff check for counterfeit currency will help ward off those attempting to use it when purchasing from you.

Forged cards

Credit card fraud is on the rise as more ecommerce transactions take place including many ‘card not present’ (CNP) purchases online and on the phone. Again, helping staff at the point of sale spot the signs of counterfeit or stolen card use will help you avoid fraudulent financial transactions.

IT fraud

On the rise as more businesses embrace technology, fraudsters use IT to try and access customer data with a view to cloning credit cards, commit ID theft and more. They use various ruses to access sensitive data, and maybe even a company’s bank account, usually through trying to get into the system through inveigling an employee to give out a password or unwittingly download software through falling for a phishing email. Ensuring your systems are kept up to date, passwords are changed frequently, granting only limited employee access as appropriate, and that staff are aware of the risks in using IT through regular security training will help foil IT fraud.

Online banking

Another example where tech advances create their own fraud risk; while online banking helps business considerably, it can open up vulnerabilities eagerly exploited by fraudsters, and is a common method of money theft such as skimming (smaller amounts abstracted so as not to be noticeable in the short term) and account hacking. It’s vital to remain diligent and only allow specific designated employees access to the company online account details, and to keep up to date with known security risks such as those communicated by your bank or other financial institution.

False invoicing

Often an employee fraud where a bogus supplier is set up and money paid to them is diverted to an account of the employee’s choosing. Guarding against this is down to ensuring regular paperwork checks and spot audits are undertaken; reconciling what suppliers your company has and ensuring the goods and services invoiced for are actually being supplied.

Invoicing changes

When someone - again it could be an employee or maybe an outsider - poses as a known supplier but asks that payments be made to a different account from now on. This is a growing fraud method due to increased use of online payments and should be guarded against by double checking when a supplier requests this such as calling back to verify it was a bona fide request.

Return fraud

This is a common fraud for companies selling online or through mail order. An item is purchased and the customer tries to return it although nothing is wrong with it, or claims they didn’t receive it, or that not everything they ordered was supplied. It’s not an easy fraud to totally eradicate, but things like signed delivery and limited times for complaints to be made could be instituted. It’s striking a balance between providing good and honest customer service but not being taken advantage of.

Fraud: a serious issue

The Association of Certified Fraud Examiners (ACFE) found that the median losses to fraud for businesses is $150,000- enough to spell financial disaster for some - so it’s important to know what fraud vulnerabilities your business may be open to.

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