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Protect your small business against fraud

  • Blog
  • 28 April 2016

As a small business, finding out you’ve been a victim of fraud can be devastating.  Fraudsters can think of small businesses as easy pickings because in general, they won’t have the same levels of protection in place as larger firms.

Fraud will not only put you out of pocket, it can also harm your reputation. There are, however, some simple steps that you can take to protect your business.

Protect your small business against fraud

Know who you are dealing with

Employees: According to actionfraud, 1 in 5 small businesses have been defrauded by an employee. Make sure you get the appropriate references and, if possible, do a credit check on any prospective employees.

Suppliers: Make sure that you check out potential suppliers thoroughly before proceeding with a transaction. Have a credit reference agency check their credentials, and do some online research. Pay attention to any reviews or mentions in online forums and search the supplier name along with trigger words like ‘complaints’ or ‘scam’.

Customers: Most of your customers will be genuine, but it is worth doing some basic research. Use a credit reference agency and be on the lookout for anything unusual. Check if they have a website, and be wary of non-business email addresses.  Use common sense, watch out for suspicious orders and if you are in any doubt, don’t proceed.

Improve your systems

In most cases, a company will provide you with a purchase order to procure your service or product so make sure you get one before you deliver. Double check that the delivery address matches the registered address or, if it’s a non-incorporated business, ask for proof of address in the form of a utility bill. Again, use common sense and if your gut tells you something is off about an order or transaction, take the better safe than sorry approach and back out.

Warning signs

Sudden change of delivery address or despatch method, orders at very busy times like at the end of the month or large orders at the start of a new month, fixed line or non-geographic telephone numbers – these could all be warning signs that something isn’t quite right. Trust your instincts and don’t proceed with anything that sets alarm bells ringing.

It’s impossible to absolutely guarantee that you will never be a victim, but you can take some small measures to ensure that you protect yourself as much as possible.

Remember, if you’re an FSB member you have access to legal documents online as well as 24/7 legal advice on the dedicated helpline.

Cyber Protection from FSB

FSB Cyber Protection includes an insurance policy with cover of up to £10,000 and an unlimited use helpline to answer all your Cyber Security questions.

Find out more