Frauds Target Businesses: Donít Be a Victim
While large firms may have sophisticated technology and
staff dedicated to thwarting crime, many small businesses donít
ó and scammers know this. There are ways to protect yourself as
a business owner, and to protect your companyís information.
Combating fraud starts by understanding some of the tools
Corporate Account Takeover (CATO) is a form of identity theft at
a corporate level. Cyber criminals acquire a companyís
credentials like account or other access information through
phishing or malware introduced into a system via an internet
download or email attachment.
"The most common and dangerous scam for small businesses is
account takeover," said Michael Benardo, Chief of the FDICís
Cyber-Fraud and Financial Crimes Section. "By sending fake
e-mails and using fake Web sites to deliver malicious software,
such as keystroke loggers, fraudsters may be able to obtain the
IDs and passwords for online bank accounts and then make
withdrawals from accounts." Electronic frauds by third parties
can be very costly to businesses, so take them seriously. The
FDIC has seen an increase in reports of unauthorized electronic
transfers made from bank accounts held by small businesses.
Because businesses are generally not covered by federal consumer
protections against unauthorized electronic fund transfers, a
bank will likely not be responsible for reimbursing losses
associated with a theft from an account if there was negligence
on the part of the business. However, the good news is that
there are sound practices you can use as a business owner to
Donít click on links in or
attachments to an unsolicited e-mail that asks for
confidential information, even if it appears to be from
a company you do business with or the government.
Legitimate organizations wonít request that kind of
information in an e-mail. When in doubt, go to another
source to find the organizationís contact information so
you can independently confirm the validity of the
Equip your computers with up-to-date
anti-virus software and firewalls (to block unwanted
access). Make backup copies of critical business data on
every computer. Also monitor account balances regularly,
perhaps daily, to look for suspicious or unauthorized
Reconcile accounts on a timely basis.
ē The more frequently you reconcile, the sooner
youíll be able to identify unusual
ē Reconcile as frequently as possible with the
ultimate goal of daily reconciliation.
ē Utilize online banking for up-to-the minute
To check out a variety of frauds
targeting small businesses and what you can do to stop them,
visit the scam alert page at