Prevent business fraud in uncertain times

Updated June 18, 2020

When disaster strikes, so do fraudsters. As business owners respond to the COVID-19 pandemic, they should be extra vigilant to protect their companies against fraudulent activities.

Business owners are impacted by two types of fraud:

• Traditional fraud, such as counterfeit checks, identity theft or stolen credit or debit cards.
• Emerging fraud, such as business email compromise, malware or phishing.

As technology evolves, criminals take advantage of the same digital tools that we use for our business and personal lives to commit fraud with greater speed and more often. This could be a scammer posing as a vendor asking to send money to a new account, a fake telephone call from the IRS or a phony cease and desist order demanding money. No matter its form, fraud can have a devastating impact for small business owners, especially as they navigate today’s uncertain times.

Many small businesses don’t have in-house fraud resources, but they can still take steps to avoid becoming the victims of fraud:

• Keep an eye out for unusual payment requests (e.g., emergency payment email from a company executive) or changes to normal payment requests (e.g., new account number for a supplier payment) and double check to make sure they are legitimate.
• If you receive an unsolicited email, do not click on links and exercise caution when handling attachments. Be sure to also check to ensure that it is coming from a trusted email address and be on the lookout for typos!
• Do not respond to emails requesting any personal or financial information from sources you don't know and trust—especially in connection with COVID-19
• Check with your partners and vendors (e.g., payment processors) to make sure they have controls in place to prevent fraud
• Monitor your accounts and personal credit reports regularly and sign up for credit alerts 

Any emails, links or attachments relating to COVID-19 should be treated with caution, as should any social media outreach, phone calls or text messages about the pandemic.

Business owners should think about how they manage the risk of their employees committing fraud or falling victim to scams. Business owners may consider additional best practices such as:

• Separation of employee duties and dual approval to execute large transactions.
• Periodic independent audits of finances and key business processes.
• Employee training to familiarize them with fraud risks and how to spot scams.
• Reminding employees of general best practices, like using strong passwords and changing them regularly.

To sum things up, avoiding scams takes vigilance and a bit of caution—especially during challenging times. If you have any scam concerns regarding a Capital One account, please call us at the number on the back of your Capital One credit or debit card so we can help you resolve them. 

Visit the FTC’s Online Security page for more resources on avoiding fraud.