Bank fraud gets considerable attention, but it is mainly discussed in the context of private citizens. At Trembly Law Firm, we have seen an increase in cases involving a business being the target of bank fraud. We not only wanted to warn businesses about what we have seen, but we also wanted to highlight that companies need to be vigilant against these attacks.
Recently we have seen banks allowing counterfeit checks to be paid out of your account and fraudulent transfers. One of the reasons we have taken note of these is that the banks have also refused refunds to the victimized business. In other situations, we have seen banks flagging an account for fraud because of a check the business has cash and refusing to provide the business with additional information. Like any other threat to your business, you must take appropriate preventative measures.
Don’t Become a Victim of Cyber Crimes
Small businesses must actively develop systems and processes to detect fraudulent activities. Reinforcing cyber security and training your employees to be your first wave of defense is a cost-effective foundation to prevent your business from being a victim of cyber crimes. Forbes reported that “…on average, an employee of a small business with less than 100 employees will experience 350% more social engineering attacks than an employee of a larger enterprise.”
Compliance Takes Commitment
Regardless of how robust your IT infrastructure is and what systems you implement to protect your business from bank fraud, they are only effective if your employees use and embrace your policies. Leadership needs to set the tone by being the example because employees will never take compliance seriously if management doesn’t. Additionally, the systems and processes you use to protect yourself from fraud should be reinforced with training throughout the year.
Your employees will be the ones who regularly meet with customers, store their data, and are exposed to confidential information. If you can limit who sees your most sensitive information, then have a secure entry. Whenever a keycard is used to gain access, there will be a record of it. These employees may receive more training due to how important it is to protect the information they are around.
Still Need to Speak with an Attorney?
We have discussed some of the issues businesses face and what steps they can take to prevent themselves from being a victim of fraud. However, scammers may still target the banks. The environment surrounding how banks handle disputed transactions is changing, and there are more questions about how liable they are for the manipulative scams that affect their customers. Before you put your business’s money in a bank, ask them how they handle the issues we cited in the opening paragraph. For example, what happens if the bank cashes a counterfeit check and uses your funds to do so? If you are unsatisfied with the response, speak with another financial institution. If you screen third-party vendors and future employees, why not apply this same mindset to the people holding your money? If you would like to discuss this matter further with an attorney, contact the Trembly Law Firm to schedule a consultation.