How To Protect Your Small Business From Fraud

Fraud and scams can happen to any business, no matter their size and tenure. It’s an occupational hazard that comes hand in hand with running a business.

Fortunately, you can do many simple things to take control and protect your company, such as protecting your information and using fraud protection programs.

Whilst all businesses are different, there are a few general principles that apply to fraud protection. This blog will focus on the main ways to identify, protect and stop fraud from affecting your small business.

Whilst there is no 'one size fits all method', the key to fraud prevention is being able to identify fraud and spam to stop it before it begins. This blog will explain ways to identify fraud and provide a few ways to prevent your business from being targeted by fraud. 

Common Scams to Look Out For 

Fraud and scams can be easy to find if you are aware of how a scam message is constructed and which ones are used. When it comes to small businesses there are a few common scams which circulate often. 

HMRC and Companies House Impersonation Scams​

Fraudsters often claim to be HMRC or other government bodies like Companies House as a way to scam money. They may claim you owe taxes, threaten legal action or suggest you’ve improperly filed your taxes or company information.

These scams leverage the authority of the government body to intimidate and pressure victims into paying a fee or clicking a link which can steal personal information from them.

One way to ensure your correspondence from HMRC, Companies House etc is legitimate is by knowing that a government body will never request personal or bank information. If you receive a letter, text or phone call encouraging you to share information like your password or bank details it can be a fraud.  

A genuine message from the government may have a link to an external website however, the link will clearly state gov.uk rather than a version of it such as gov.com/uk etc.

Gov.uk also publishes a comprehensive guide on how to detect government-related scams and where to report any fraud you may detect.

Phone number and email spoofing​

Scammers may pretend to be representatives from banks by using technology which spoofs legitimate caller IDs or email addresses from banks and other trusted institutions.

Similar to HMRC scams, a bank will never outwardly ask you for personal information like your password or card number. If you’re in doubt about the legitimacy of the phone call or email, stop communicating with it and contact your bank through the number or email provided on their website. On this call/email, they will confirm if this was legitimate communication from your bank.

Essentially, when in doubt stop communicating with the correspondence in question and authenticate via the genuine institution. 

CEO Fraud

In these scenarios, fraudsters pose as senior managers or executives, emailing or messaging employees, partners or clients requesting urgent bank transfers, gift card codes or sensitive financial information.

A good way to combat this is by checking the email or number you receive this message from against the actual email/number of the person they are posing to be. Scammers will create new email addresses which may look legitimate but will not match the real email ID/Number.

Most importantly, you can directly message the person the scam is imitating to ask whether it is legitimate or phishing. Always report fraud like this to your IT department so they can issue a message to your team and investigate the fraud. 

Tech support scams​

Your business may receive calls or emails from scammers claiming to be tech support from well-known companies, alleging that the business's IT systems are at risk. They aim to remotely access your laptop and steal data and personal information.

Real tech support will never make unsolicited calls or emails which ask for your personal information. If you are in doubt, simply hang up and directly contact the company they claim to be yourself. 

How To Prevent Scams

Awareness is key to preventing fraud and scams. Keep updated with common scams and fraud techniques, always double-check the email or phone number calling you against real company information online and when in doubt do not engage.

Finally, do not share any personal information or click any links if you are unsure. Fraudsters will always create a false sense of urgency in order to intimidate victims into giving their information. A real institution will send multiple reminders or warnings before a final notice, whereas fraud messages may pop up out of nowhere. 

Block and Report Scam 

A good way to prevent scams is by blocking any fraudsters and reporting their calls, emails or messages to Action Fraud. By engaging with scams you allow them to place your data on lists which other fraudsters can access, which opens you up to more fraud. The best practice is to try not to engage, block and report.

Internet Security 

Make sure to invest in a good internet security package to protect your web browsing and digital data. Make sure any software you use for your business is encrypted and legitimate.

Be sure to vary your passwords and set up two-factor authentication (2FA) for all your accounts, especially social media accounts. 

Protect Your Personal Information 

Of course, fraud is facilitated by the availability of your details online. As a business owner, you are more likely to be targeted due to the public Companies House register which lists your business details. Particularly, your registered office address and your director’s service address.

Most small businesses opt to use their residential address as their registered office address. This allows anyone to access your home address, opening you up to fraud.

An easy way to protect your personal address without breaking the budget for office space is through a registered office service. With a registered office service you pay a provider to use their office address. The provider will securely sort and scan your post and send you all official government correspondence.

You can reduce your exposure to scams and fraud mail by using a registered office service as the provider will filter out all scam mail and only send you necessary mail from HMRC, Companies House and other UK government buildings.

For an additional fee, your provider can forward all posts sent to your company, such as bank letters, this service is called mail forwarding.

Fraud Protection for your Companies House Details

Secondly, your business’s details can also be open to fraud. Companies House, the UK’s registrar of all companies, accepts documents in ‘good faith.’ This means that someone can make any change to your business without your permission or knowledge.

A fraud protection service that alerts you whenever a change is made to your business, whether it's with your consent or, more importantly, not.

By using an fraud protection service, you can keep your company operations running without any disruption or damage. 

Protect Your Details

Protecting your company and its details is essential to the longevity and success of your business. By opting for fraud protection, and IT security and increasing your knowledge about scams, you can ensure that your business runs safely and without disruptions.

Find out more about how we can help you keep your business safe and secure through Fraud Protection and our Registered Office Service today.