116 3rd St SE
Cedar Rapids, Iowa 52401
Increase financial literacy to reduce risk
April is National Financial Literacy Month. Financial literacy is critical because it equips us with the skills and tools to manage money effectively.
It is especially important for small business owners, who often have significant intertwining between their business and personal finances.
Small businesses, like individuals, are susceptible to scams. Con artists rely on gaps in knowledge, awareness and preparedness among small business owners and their employees to successfully perpetrate scams.
BBB research suggests that small businesses are particularly vulnerable to scams, are less inclined to report scams, are likely to be subject to repeat attacks, and are particularly susceptible to online scams.
As mentioned, there is considerable overlap between scams targeting individual consumers and those targeting small businesses, with or without employees.
BBB believes that the scam activity directed at small businesses is growing, that these scams pose a significant risk and that they generally result in a higher monetary loss per incident than those targeting individuals.
By learning about scammers’ methods and how common scams work, by proactively educating business owners/employees and by raising awareness, we can potentially minimize the impact of scams on small business.
Scams can reach and impact every business, regardless of location, size, industry or length of time in business. And while scams vary in sophistication, businesses lose money to all types of scams every year.
To better educate businesses and effectively combat small business scams in general, BBB believes it is important to target reporting and educational opportunities concerning susceptibility and the impact of small business scams.
Spreading the word about the risks, approaches and methods of scammers — and the most common types of scams — can help us create a safer and more trusted marketplace for all.
BBB suggests the following tips and best practices:
- Update cybersecurity policies. Pay special attention to those that give guidance on working remotely. Review existing policies and ensure they are adequate.
- Regularly check your website and read reviews. Theft or compromise of your business identity is a very real threat and it is important to act quickly.
- Keep sensitive data from being accessed through unsafe Wi-Fi networks. With employees working from home there is increased access to sensitive business data.
Consider setting up network visibility to detect unprotected devices with notifications of suspicious behavior.
- Have a plan for authorizing financial transactions. The biggest financial losses occur from email compromises where scammers spoof the account of a senior staff member then instruct another member of staff via email to make a transfer.
- Protect your business’s bank accounts. Review your commercial banking agreements to determine your protections and reporting requirements.
Consider using a two-person authorization or other arrangement with your bank to protect against fraud.
- Protect and monitor your business’ credit card, supplier and trade accounts. Keep an inventory of accounts and key contact information. Review and reconcile account statements as soon as they are received and immediately alert your credit card company if you find fraudulent activity.
- Watch for employee negligence, errors and dishonesty. Stay on top of processes and procedures even with a trusted long time employee. Make sure that your insurance coverage is sufficient for these and other incidents.
- Keep staff updated on scams and cybersecurity risks. Phishing campaigns are a threat for all employees, whether they are based in-office or work remotely.
- Implement a crisis management and incident response plan.
For all employers especially those pivoting to a new normal, a problem quickly can spiral out of control.
Update your plan and make sure that provisions and responsibilities are firmly in place.
Bobby Hansen is regional director for the Better Business Bureau Cedar Rapids office; (319) 365-1190.
Bobby Hansen, Better Business Bureau Cedar Rapids
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