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On the 15th August 2011 TD Bank launched the results of a survey that indicates small businesses (sub $5 million) do not have Business Fraud as their top priority, in fact only 1% of survey respondents said it was a top priority.

TD Bank’s survey polled 300 small business executives in its Maine to Florida area  to understand their current awareness of small business fraud, as well as their top external concerns over the next 12 months.

“It’s encouraging to see that small business owners are taking steps to protect their business, but fraud protection should be a high priority and it pays to be vigilant,” says Fred Graziano, Head of Commercial and Small Business Banking at TD Bank. “Given the influx of new digital technologies and operational tools available for small business owners, it’s increasingly important to learn about the latest trends and techniques used by criminals, and to be more diligent in defending against fraud.”

Graziano and Robert Dunlop, TD Bank Director of Corporate Security and Investigations, offer the following advice to small business owners to protect their business from fraud:

Manage finances  using secure online banking.

Online banking is a secure and essential tool for any small business  owner. The benefits of this useful service include 24/7 access to real-time information, account transfers and payment management. Small business owners can easily schedule and manage payments, submit remittance information, and have an audit trail of all transactions.

“It’s important for small business owners to check their account activity regularly,” says Graziano. “Having instant access to payment history helps businesses closely monitor their spending for any discrepancies. If there are any, contact your financial institution immediately.”

Protect computer systems and practice online awareness.

“Being complacent about cyber protection can lead to the compromise of critical information and detrimental consequences for a business,” says Dunlop. “Every computer at home or in the office should have installed and regularly updated firewalls and anti-virus software.”

While conducting business online, be aware of “phishing” – an electronic scam that attempts to obtain confidential personal or financial information from its target. It takes the form of a fake message, usually an e-mail, which appears to be from a financial institution or service provider. While some e-mails are easily identified as fraudulent, including some containing enticing headlines, others may appear to come from a legitimate address.

“If an offer received via e-mail or on a website sounds too good to be true, it probably is,” says Graziano.

Safely handle sensitive documents and financial statements.

“The web isn’t the only place where thieves can steal valuable information from a small business,” says Dunlop. “Employees and outside parties can steal important mail, credit card information or checks, and commit fraud.”

Printed financial statements, social security numbers and other sensitive papers should be disposed properly using a shredder or saved in a securely locked device.

“To avoid the hassle of handling several papers, banks such as TD Bank allow customers to opt out of paper statements and receive online statements instead,” says Graziano.

According to Dunlop, technological advances have even put photocopiers at risk, “Most photocopiers built since 2002 contain a hard drive that stores every image scanned, copied or emailed. When a business sells or upgrades their copier, the machine is usually cleaned up and reconditioned, but often times the hard drive is left intact and is not scrubbed,” says Dunlop.

Once resold, it’s possible for anyone to simply pop out the hard drive and access, and sell confidential information such as income tax and bank records, social security numbers, and birth and medical records.

“Businesses need to be aware of this and treat documents in the standard office copier just as they would any printed document, and guard that information accordingly,” says Dunlop.

Obtain fidelity insurance.

“Crime and fraud-related losses generally aren’t covered by property insurance policies, so it’s important to protect money losses from workplace fraud,” says Dunlop.

Fidelity insurance protects your business against criminal acts such as robbery, embezzlement, forgery and credit card fraud. Liabilities secured under this type of insurance usually include money loss coverage (burglary or theft) and employee dishonesty (embezzlement and forgery).

Search for low rates and partner with a broker, such as TD Insurance, who can help shop for the best deal.

Incorporate appropriate checks and balances.

Every small business owner should perform an internal review and assessment of company finances on a monthly basis. Make sure payment amounts match all invoices and check for any missing documents.  “Running random audits or having a third party audit the books once a year will show employees you are serious about fraud and deter them from committing deceptive acts,” says Graziano.

TD Bank advise that if you think you are a victim of business fraud, immediately contact the fraud department of any of the three major credit bureaus to place a fraud alert on your credit file. Also, contact your banks, credit card issuers and other creditors where your finances and information are available.

More information on TD Banks Security can be found here.

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