Introduction to Business Protection

Protecting your business starts with awareness. Every business has areas that need extra attention, especially when it comes to payments, account access, and customer information.

Start by looking at where your business may need stronger safeguards. This could include how payments are approved, who can access private information, and how employees sign into business accounts. Recognizing the gaps in these areas allows you to strengthen your operations and reduce risk.

Identifying Common Fraud Types

Fraud can take many forms and often targets businesses through internal and external methods.

External Fraud

Some fraud attempts come from people outside the business who pretend to be someone trustworthy or try to trick employees into sharing information or sending money. Common examples include:

  • Phishing: Fake emails, texts, or messages that appear to come from a trusted source and ask for login details or financial information.
  • Business Email Compromise (BEC): Messages that appear to come from an executive, vendor, or employee and ask staff to send money or share private information.
  • Fake invoice scams: Bills for products or services the business did not receive.
  • Ransomware attacks: A type of cyberattack that can limit access to business files or systems.
  • Vendor impersonation: Requests to update payment instructions or banking information that appear to come from a supplier.

Internal Fraud

Internal fraud refers to situations where access to business accounts, records, or property is not used as intended. Clear review processes can help protect both the organization and its employees. Common areas to monitor include:

  • Expense reports: Reviewing reimbursements to make sure expenses are accurate, approved, and properly documented.
  • Payroll records: Checking employee records, hours worked, and pay changes for accuracy.
  • Company property: Keeping track of cash, inventory, equipment, and other business assets.
  • Financial records: Reviewing account activity and bookkeeping records to make sure funds are used and recorded correctly.


Preventive Measures Against Fraud

To reduce the risk of fraud, it's important to establish robust security protocols that address both internal and external vulnerabilities. Start by ensuring employees are educated about the warning signs of fraudulent activity and understand their role in maintaining secure practices.

Limiting access to sensitive data and systems is another critical step. Only employees who require specific information or tools to perform their job should have access to them. Implementing multi-factor authentication and updating passwords can help prevent unauthorized entry into your business’s systems.

Regularly monitor your business transactions for unusual activity. Use automated tools to track activity and flag unusual patterns for further review. Additionally, verify all vendors and suppliers thoroughly before entering into agreements or processing payments. Cross-checking their credentials can help detect potential scams.

Establishing an anonymous reporting system for employees to flag suspicious behavior internally can also deter potential misconduct. When employees feel safe reporting concerns, they are more likely to help identify issues early.


Responding to a Fraud Incident

If your business notices possible fraud, take action right away and follow a clear plan. Start by securing any compromised systems or accounts to prevent further damage. This may include freezing accounts, resetting passwords, or limiting access until the issue is reviewed.

Next, document unusual transactions, communications, and system logs to support the investigation. Depending on what happened, you may want help from an accountant, IT specialist, or cybersecurity professional who can review the issue and recommend next steps. Their guidance can help you understand what happened, what may need to be fixed, and how to strengthen your safeguards moving forward. If business partners, investors, or other key contacts need to be informed, share updates carefully and avoid including private information unless it is necessary.

If you suspect your business has been targeted by fraud, report the incident to the appropriate authorities as soon as possible. Businesses can report fraud, scams, and deceptive activity through the Federal Trade Commission's Report Fraud portal.


Visit Maspeth Federal Savings’ Business Resources page for helpful articles, fraud prevention tips, calculators, and other tools to help you make informed business decisions.