Prevent Check and Email Fraud: A Guide for Small Business Owners

As a small business owner, you wear many hats. From managing finances to overseeing daily operations, your plate is always full. However, amidst the chaos, it's essential to prioritize one critical aspect of your business: fraud protection.

Check and email fraud are rampant today, and small businesses are often the most vulnerable targets. According to the Association of Certified Fraud Examiners (ACFE), small businesses with fewer than 100 employees are disproportionately affected by fraud, with a median loss of $200,000 per incident.

In this guide, we’ll delve into the world of check and email fraud, exploring the warning signs, prevention strategies, and best practices to safeguard your business.

Understanding Check Fraud

Check fraud occurs when someone alters, forges, or steals checks to obtain unauthorized funds from your business account. This type of fraud can be devastating, as it can lead to significant financial losses and damage to your business's reputation.

Common Types of Check Fraud

• Check forgery: Altering or creating fake checks to withdraw money from your account.
• Check alteration: Modifying legitimate checks to increase the amount or change the payee.
• Stolen checks: Stealing checks from your business or mail to cash them fraudulently.

Warning Signs of Check Fraud

• Unusual or missing checks: Discovering checks that you didn't write or can't account for.
• Unfamiliar vendor names: Receiving checks from vendors you've never worked with or don't recognize.
• Discrepancies in account statements: Noticing unauthorized transactions or inconsistencies in your account balances.

Preventing Check Fraud

To protect your business from check fraud, implement the following strategies:

• Use positive pay: A fraud prevention tool that verifies checks against a list of issued checks to detect discrepancies. Protect Your Business from Fraud
• Secure your checks: Store checks in a safe, secure location, and limit access to authorized personnel.
• Monitor account statements: Regularly review your account statements to detect suspicious activity.
• Instill dual control: Have two people approve and authorize transactions.
• Provide employee training: Educate everyone on fraud and how to recognize suspicious activity.

The Rise of Email Fraud

Email fraud, also known as business email compromise (BEC), is a growing concern for small businesses. Scammers use social engineering tactics to trick employees into transferring money or sensitive information.

Common Types of Email Fraud

• CEO fraud: Impersonating a CEO or executive to request wire transfers or sensitive information.
• Vendor fraud: Posing as a vendor to request payment or modify payment information.
• Phishing: Sending fraudulent emails to trick employees into revealing login credentials or sensitive data.

Warning Signs of Email Fraud

• Urgent or threatening language: Receiving emails with urgent or threatening tone, asking for immediate action.
• Misspelled URLs or email addresses: Noticing slight variations in URLs or email addresses that appear legitimate.
• Request for sensitive information: Receiving emails asking for sensitive information, such as login credentials or financial data.

Preventing Email Fraud

To protect your business from email fraud, follow these best practices:

• Verify requests: Confirm requests for wire transfers or sensitive information through phone calls or in-person meetings.
• Be cautious with links and attachments: Avoid clicking on suspicious links or opening attachments from unknown senders.
• Implement employee education: Educate employees on email fraud tactics and the importance of vigilance.
• Use secure systems: Make sure to use up-to-date security software and firewalls.

Safeguarding Your Business

By understanding the warning signs and prevention strategies for check and email fraud, you can significantly reduce the risk of fraud in your business.

At MidWestOne Bank, we're committed to helping small business owners like you protect their businesses from fraud. Our Small Business Bundle is designed to provide you with the tools and resources you need to stay ahead of fraudsters.

Take the First Step in Protecting Your Business

At MidWestOne Bank, we're committed to helping small business owners like you protect their businesses from fraud. Our Small Business Bundle is designed to provide you with the tools and resources you need to stay ahead of fraudsters. Here's what it includes:

• Positive Pay (Check, ACH, Payee, Teller Line)
• Mobile Deposit
• Business Online Banking
• Business Bill Pay

It’s safe, easy, worry-free, automatic and your first line of defense against fraud. Fill out the Small Business Bundle form today to start protecting your small business from costly fraud!