3 WAYS TO PREVENT IDENTITY THEFT IN YOUR BUSINESS

identitytheftHere are three ways to prevent your business identity information from being used by criminals to commit fraud.

1. Review Your Commercial / Business Banking Agreements.
Business / commercial bank accounts are covered by the Uniform Commercial Code (UCC). Under the UCC, businesses have shorter reporting timelines, less protections, and higher liability for fraud than with consumer banking accounts. Additionally, individual banks can shorten the fraud reporting timelines even further, or disclaim certain obligations, through amendments to their commercial banking agreements, so it is important to know your bank’s policies as these can have a significant impact on your business’ liability for fraudulent transactions.

2. Create Security And Authentication Controls To Protect Against Fraudulent Wire Transfers And Electronic Transactions.
Wire transfer and electronic payment fraud are serious threats to businesses. Through spyware and compromised banking credentials, criminals can initiate fraudulent payments and transfers out of the business’ bank account. Because these transactions occur quickly, businesses often do not catch the fraud in time. Even finding and reporting the fraud within hours can frequently be too late to stop the transfer or recovery of the funds. Businesses hit by wire transfer fraud regularly suffer significant losses and may only recover some, if any, of the stolen funds.

If your business utilizes wire transfers, implement dual controls that require two party approval for outgoing wire transfers – both a wire transfer originator and a separate transfer authorizer. If an outside third party fraudulently initiates a wire transfer, the additional authorizer control can help prevent the transfer from being approved and completed. Some financial institutions also offer multi-factor authentication, which not only requires the approval of multiple persons in the organization, but also multiple methods of approval (email, fax, telephone, special tokens, etc.) before a transfer is approved.

If your business does not use wire transfers, consider inquiring with your bank if you can filter, limit, or block wire transfers altogether. If not, in addition to placing dual controls on wire transfers, you can also set the maximum wire transfer amount to the lowest possible dollar amount.

3. Monitor And Reconcile Your Business Accounts Daily And Consider Online Banking.
Frequent account review and immediate reporting of suspicious or fraudulent transactions can reduce your business’ liability and potential fraud losses. Online banking allows you to quickly log in to your bank account and view your business account balance and transactions. Many banks also provide email and text alerts regarding your account activity, which can help alert you to suspicious transactions. Through online banking, you can also eliminate mailed paper statements which can further reduce the risk that your business banking information may be stolen or exposed.

If your business does not use wire transfers, consider inquiring with your bank if you can filter, limit, or block wire transfers altogether. If not, in addition to placing dual controls on wire transfers, you can also set the maximum wire transfer amount to the lowest possible dollar amount.

Protecting your business name from fraudulent activity is a serious matter. If you have questions, please call our office today.

Source: http://businessidtheft.org/Prevention/tabid/87/Default.aspx

As a CPA/small business advisory firm, we mentor small business owners to empower them with the knowledge and skills to run a successful business. Allow us to evaluate your small business needs today. Give us a call at (727) 391-7373 or contact us at http://www.LStortzCPA.com

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