Business owners must take action year-round to ensure they are protected from data breaches and other forms of online fraud, advises BMO Financial Group Canadian to mark the Fraud Prevention Month.
“The Internet offers some of the most valuable tools to run a small business, but whether it’s marketing day-to-day communications with vendors, communicating with customers or e-commerce, there’s a risk of online fraud and data security breaches,” says Michael Bonner, vice president, commercial banking, Bank of Montreal.
Read: 5 types of insurance fraud
According to the Government of Canada’s Anti-Fraud Centre, over 16,000 people are identified as victims of fraud every year, accounting for an estimated $54 million in losses.
Internet scams, virtually unheard of a decade ago, now cost millions in fraud each year. The Government of Canada estimates incidents of this type of fraud have risen 77% since 2005.
As data security breaches become an increasing concern for businesses and consumers, governments around the world are tightening their fraud regulations. The Canadian government, for instance, has proposed legislation that requires mandatory reporting of security breaches to the Privacy Commissioner of Canada.
Read: Educate clients about financial fraud risks
Some tips for business owners to minimize instances of fraud:
Limit data access: Ensure that you have rigorous internal processes to manage functions like payroll accounts and bank transfers. All it takes is your account number and bank transit information to initiate fraudulent bank transfers from unauthorized sources.
Guard personal data: If it is not an essential element for doing business, do not store personal customer data such as Social Insurance Numbers.
Record storage and disposal: Your sensitive data should never just be thrown out with the trash – that’s the number one way fraudsters can gain access to restricted information and customer data.
Encrypt data on devices: Laptops and tablets are the biggest data security breach points. Encrypt all sensitive data. Also, the devices should be stored overnight and not left in cars or unattended in public spaces.
Advertise security measures: Customers want to feel secure in their e-commerce transactions. By identifying on your website that you have state of the art certifications, they can proceed with greater confidence.
Don’t use free email services: Web-based email is great for your personal life, but it shouldn’t be your primary channel for conducting business and exchanging sensitive data and customer information.
Check your bank accounts: Regularly log-on to review your bank account and monitor for any discrepancies. Talk to you banker about any suspect charges or irregularities.