Eight tips for small businesses to protect against online fraud

While March’s Fraud Prevention Month is coming to an end, BMO Financial Group reminds Canadian small business owners that actions can be taken year-round to protect against data breaches and other forms of online fraud.

“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,” said Michael Bonner, Vice President, Commercial Banking, BMO Bank of Montreal, in a statement.

The Government of Canada’s Anti-Fraud Centre says 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 per cent 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.

“Fraud is a direct threat to the success of our business customers. At BMO, we want to help business owners with precautions that they can take and provide helpful advice,” Bonner added.

BMO offers the following tips to help business owners minimize the occurrence of data security breaches:

1. Prevent Hacking: Talk to your financial institution about how to protect your online accounts from hackers and phishing scams. This includes understanding what your institution will and won’t ask for by email, such as password and account information.
2. Limit Access to Account Data: 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.
3. Limit the Amount of Customer Data Needed: If it is not an essential element for doing business, do not store personal customer data such as Social Insurance Numbers.
4. Record Storage & 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.
5. Encrypt Your Laptop and Tablet Data: Laptops and tablets are the biggest data security breach points. They should be stored overnight and not left in cars or unattended in public spaces.
6. Advertise Your Security Certifications and Encryption Technologies: 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.
7. Don’t Use Free Email Services to Conduct Business: 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.
8. 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.

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