Frauds can have serious financial consequences for business owners. They can cost millions of dollars in personal as well as business losses. Some of the common frauds that businesses face are:

  • Money laundering
  • Securities and commodities fraud
  • Mortgage fraud
  • Embezzlement
  • Financial institution fraud
  • Intellectual property theft

Here we discuss some useful tips for business fraud protection:

1. Build a positive work environment

Having a positive work environment can help prevent internal fraud and theft. In a positive work environment, employees are more likely to adhere to policies and procedures.

2. Hire honest employees

Hiring honest employees is easier said than done. Implement a thorough background check when hiring employees. Conduct a pre-employment background check. If possible, speak to previous employers for a character check.

3. Know your business partners

In many cases of business fraud, usually it is the partners who dupe others.
Before getting into a business relationship with individuals or companies, do background checks. Know their physical address and seek references. Are references genuine? How long have they been in business? You can also contact your local, state or provincial government commerce department to find out about registered businesses.

4. Implement internal safety protocols

To prevent business identity fraud, it is important to safeguard your company’s assets and confidential information. Here’re some ways to prevent business identity fraud:

  • Safeguard computers and technology
    Use security software to protect your laptops and other devices against ransomware, phishing attacks, business email compromise, and data breaches.
  • Outline company policy
    Ensure that employees know what they can and cannot do with company assets. This will reduce risky behavior.
  • Train your employees
    Train employees on different types of business fraud and how to avoid common threats. They should be trained to spot phishing emails and suspicious messages.
  • Back up your data regularly
    Back up data on a regular basis so that you can recover it after a cybercrime or data-related fraud.
  • Use strong passphrases
    Passphrases are like passwords, but their purpose is to encrypt the private key.  A good passphrase should have at least 15 to 20 characters and be hard to guess. No part of it should be derivable from personal information about the user.

5. Audit books regularly

You should routinely audit cash transactions, refunds, product returns, and inventory management. Make sure that there are occasional non-scheduled audits to detect fraud in critical business areas.

6. Get expert help

If you’ve implemented fraud prevention steps and yet, you are facing problems, you must hire an attorney. When hiring attorneys, make sure that they have expertise in a wide range of frauds such as business, real estate and investment fraud, embezzlement, and international fraud. Given how complex financial crimes are, it is important to hire an attorney who has years of experience and knowledge.

If you’re a victim of business fraud and looking for an attorney, get in touch with David L. Fleck. He has fought lawsuits involving complex schemes of con artists and scammers and has secured courtroom wins for businesses that suffered fraud.