Fraud is everywhere and affects everyone. That’s a pretty broad statement, but it couldn’t be more true. From the largest conglomerates to the smallest mom and pops, businesses of all sizes are constantly under threat by fraudsters conducting data theft and payment fraud attacks. So how does a business protect itself and thwart these attempts at compromising their reputation and costing them customers? The most important step is separating the myths about fraud from the facts about fraud.
Let’s face it, myths can provide a level of comfort and con you into thinking that your business is safe. It’s important to realize that the false comfort that comes with common fraud misconceptions will evaporate the moment your business becomes the victim of a fraud attack – facing the facts about fraud enables you to put protections in place and reduce your business’ vulnerability.
Consider these 5 common misconceptions and ask yourself what side of the fence you fall on:
I can easily spot fraudsters. Did you know that the typical internal fraudster has been employed for at least 6 years and is likely to hold a senior position? That means they’ve been around long enough to understand the financial systems in place and have access to areas off-limits to most staff. Also, in many cases these fraudsters don’t work alone and often collude with either internal or external parties, making detection that much harder.
We've already got it covered. I'm in control. When it comes to protecting your business from fraud, complacency is your biggest enemy. Fraudsters become more sophisticated every day by leveraging the latest technologies to find and exploit your company’s weaknesses. If you aren’t regularly testing and evaluating your fraud protection platform you risk leaving your business open to attack. Early detection is key to limiting the damaging effects of an attack, which means underestimating your vulnerability to fraud is a missed opportunity to protect your business.
It’s not my responsibility. Actually, protecting a business against fraud is EVERYONE’S responsibility – collaboration between IT, Finance, HR and other teams is key to reducing fraud risk and exposure. The Finance team is responsible for paying and getting paid, so they are likely the closest to the area that will be targeted, but without the use of data from the IT team and HR’s education of employees the fight against internal fraudsters may be lost.
I’ve got a good IT security system. It’s fine. Many businesses believe that fraud is a firewall and security issue. In fact, it goes well beyond that, especially in the case of internal fraud which accounts for nearly two-thirds of all economic crime. There are three critical areas that business need to regularly monitor to reduce risk – processes, people and technology.
My business isn’t big enough to be impacted. Small and medium-sized businesses are often victims of fraud, but the majority believe they are not the target of hackers. This is a dangerous misconception and puts these business segments at an even greater risk of compromise. Hackers take advantage of this by committing high-volume / low value fraud – enabling them to essentially fly under the radar.
While it’s true that your business may not be prepared to deal with the reality of fraud, the sooner you recognize threats the sooner you can put protections in place to make it harder for fraudsters to be successful.
For additional guidance on how to protect your organization against attacks, check out How to Prevent Fraud in Business: 5 Secrets to Success
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