There have always been swindlers in this world. People who are out for a quick buck, profiteering from unsuspecting victims.

In fact, the earliest case of fraud was recorded in 300 BC when two Greek sea merchants attempted to sink their ship in order to claim an insurance policy.

(Just so you know, the scheme didn’t pan out well for Hegestratos and Zenosthemis as one lost his wife and the other was prosecuted, but it wasn’t through want of trying!)

In recent years, the rise of technology and new digital platforms has also seen a rise in fraud.

Some fraudulent activity is known as a “scam” and is easy to spot and avoid. Yet some attempts at fraud are more sophisticated and end up trapping unsuspecting people; sometimes losing money or assets in the process.

Fraud is a very real threat to personal and business finances, so these are some simple ways that you can protect against it.

The Rise Of Fraud And How To Prevent Becoming A Victim

What Is Fraud?

Fraud is a kind of deceptive behaviour that is carried out for personal gain or to damage others. Generally, it involves intentionally manipulating circumstances or misrepresenting information in order to deceive individuals, businesses or online systems.

There are a number of different types of fraud that we need to be mindful of in our modern society. They range from things as simple as a phishing scam where you are tricked into providing personal or financial information, making fraudulent payments, or unknowingly downloading malicious software, through to major identity theft.

Fraudsters are very savvy and will adapt their methods to exploit current vulnerabilities. So, to negate their evolving tactics, it’s crucial to stay informed and take the necessary precautions to protect yourself and your business.

How To Protect Against Fraud

Get Educated

As we’ve already mentioned, there are numerous types of fraud that you could fall prey to. Which is why it is very important to stay informed about the different types of fraud and common scams that exist. Understanding the tactics that fraudsters employ can help you to recognise and identify potential threats.

Be wary of:

• Things that seem too good to be true like notification of a huge inheritance, promises of a high return on investments, or easy money-making opportunities
• Unsolicited communication like emails, texts or calls from people you don’t know
• Requests for personal information or passwords
• Someone unknown trying to pressure you into an urgent or snap decision
• Unprofessional communication that contains poor grammar and spelling or awkward language
• Requests for payment by unusual methods like prepaid gift cards, cryptocurrency, or wire transfers (these are preferred methods by scammers as they are payment methods that are difficult to reverse)
• Lack of verifiable information about an organisation, like a generic or random email address, or them refusing to give direct answers to your questions.

Be Secure

Just like you would lock your home and your car to protect against theft, you want to do the same with your personal and business information. Be protective of your bank accounts, passwords, credit card info and identity details. Don’t share sensitive data online and be very cautious of making payments through unsecured websites. Be equally cautious with hard copies of personal documents and don’t leave a notebook containing your passwords near your computer!

Use Strong Passwords

Passwords often protect critical information. That’s why you should use unique and strong passwords for all of your online information. A strong password contains a combination of upper and lowercase letters, numbers and special characters. You should avoid using information that is easily guessable, such as your name or birthdate. Try not to use the same password for multiple websites.

If you find that you have trouble remembering all of your individual passwords, use a secure password manager like LastPass. This software stores all of your sensitive information and can be accessed with one master password. It will also help you securely protect sensitive client password information too.

Where possible, set up double or two factor authentication for your log ins. That’s when you need a password as well as a secondary approval to verify your identity. Depending on the system, it could be an independent authentication app, confirmation via device alert or biometric authentication.

Keep Your Software Updated

As scammers and fraudsters expose weaknesses in certain softwares or systems, developers will release software updates with added security features. Regularly updating your software systems will ensure you have the latest security protections against fraud. This can include individual apps and software programs, but also your operating system, web browsers and antivirus technology.

Secure Your Devices

It is not only your computer or laptop that is at risk when it comes to fraud. You also need to be mindful of your handheld devices. At the very least, you want a password on the lock screen to prevent people from being able to get into your phone or tablet. But, biometric authentication is better, such as fingerprint or facial recognition.

Keep An Eye On Your Finances

Regularly review your bank accounts to ensure that there aren’t any unauthorised transactions. To minimise the risk of this happening, set up alerts to notify you of suspicious activity. If you do locate any unexpected transactions, it means that someone could have access to your financial information so alert your bank immediately.

Be Cautious Of Public Wi-Fi

Public WiFi can be really handy to check things when you are out and about. However, you need to be conscious of the fact that these networks are not secure. So, avoid accessing sensitive information like your bank accounts or entering payment details while logged into these networks.

Follow Your Instincts

While you don’t want to be suspicious of everything and everyone, it is helpful to use caution and follow your instincts. Be sceptical of all the things mentioned above. Trust your instincts and take the time to verify anything that seems suspicious, like unfamiliar people or organisations. Make sure you have full trust before sharing personal information or making financial transactions.

Business Caution

Many of the cautions we have already listed are vital from a personal or business perspective. But, as a business owner, there are some additional fraud protections you can implement. They are:

e-Invoicing

E-invoicing is the process of creating, sending, receiving and processing invoices electronically, using digital formats and automated systems. Adopting e-invoicing can be an additional measure to protect your business against fraud. E-invoicing systems usually have data verification and authentication measures that verify the authenticity of an invoice.

They also provide a transparent audit trail of where the invoice has come from and where it has been paid to, allowing both sender and recipient to track it from open to close. Often e-invoices integrate with your financial system allowing for a seamless and secure transfer of data.

If you aren’t sure how to integrate e-invoicing into your business effectively, then check out our next tactic to prevent your business against fraud:

Hire Expert Help

A bookkeeper can play a crucial role in helping to protect your business against fraud as they maintain effective internal controls and accurate financial records. This reduces the risk of fraud as they are always across your financial position and can recognise any discrepancies or red flags.

Your bookkeeper will regularly reconcile your bank accounts and monitor your cash flow, so they will immediately see any changes in financial patterns or unexpected transactions. As it is their professional responsibility, a bookkeeper will stay updated on the latest fraud schemes, scams and techniques used. They can then use this knowledge to take appropriate measures and help to prevent fraud from happening in your business.

If you don’t have a bookkeeper, we would strongly recommend engaging one as a great fraud prevention tactic. Here at ICNZB, we have a directory full of skilled, certified bookkeepers who can help to protect your business and maintain accurate financial records on your behalf.

Browse that directory HERE.