As an entrepreneur, it’s important to look for scams and cons that frequently target towards small businesses. They’re a big threat – only one in three small businesses uses a fraud protection service. And just 18% of small businesses use dual controls to keep the risk of insider fraud at bay.
Read on to find out how you can reduce the risk of fraud, and what to do if you get hit.
How you can protect yourself from small business fraud
- Keep your eyes open for invoices of products you didn’t order, membership renewals and signs of identity theft for you or your customers.
- Ensure that your business has the proper controls in place to prevent fraud. For example: two people signing off on all cheques, and two people to approve all expenses.
- Keep an eye on your own accounts – don’t rely on the bank to do it for you.
- Perform good background checks on all employees who will be handling money.
- Trust your instincts – if something doesn’t seem right, it probably isn’t.
Check out this Metro article for more great tips on small business fraud prevention.
What to do if your small business is targeted by a scam
If your business has been targeted by a scam, you should contact the Competition Bureau’s Information Centre online or by phone at 1-800-348-5358.
In the case of confidential customer information going missing or getting duplicated, your business could face some major legal issues. If any problems occur involving confidential customer information, contact the affected customers, credit agencies, and the police. The RCMP has an online area for reporting economic crime.
Credit and debit card fraud are also very common in small businesses. In 2008, more than $500 million was lost to debit and credit card fraud in Canada. The RCMP has launched a program called Project Protect in order to help owners, managers and employees of retail businesses deal with this important issue. Microchip technology has also been developed to offer increased protection against credit and debit card fraud.