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Tips for businesses, consumers to be on the lookout for fraud

Albert Bulson, M&T Bank risk manager, said fraud has become a big issue for businesses, especially with the shift to online practices during the COVID-19 pandemic. (Submitted photo)

Did you take out $5,000 from your bank account? How about charging your company a storage fee in the thousands when one is not needed? Is money missing from certain places where it should not be?

If you have no knowledge of these transactions but they are on your statements, you are most likely a victim of fraud.

The crime “is probably the number one largest issue that we are dealing with every day as well as our business customers,” said Albert Bulson, M&T Bank risk manager. A few years ago, identity theft was the most popular crime targeting consumers. “Now we have seen this shift in the crooks where it has spread from the consumer to the business owner and then the business itself which has been an interesting shift in probably the last two years.”

He believes the shift is technology-related as many people and businesses shifted to online practices during the COVID-19 pandemic. “I think the access of information is much greater than what it was,” Bulson said. “You can buy anything on the dark web. You can buy a social security number for a dime. You can get an entire list for probably $5. You can get customers’ information. You can get the driver’s license (numbers).”

Consumers don’t know the cybersecurity measures undertaken by the websites where they purchase goods. They also could have malware on their devices and not know. “Someone could be in the back right now with malware just collecting information and sitting and waiting to pounce on you,” Bulson said.

Consumers and businesses can work to prevent financial scams in several different ways. Bulson notes daily monitoring plays a huge role including looking at your accounts periodically throughout the business day.

“We are in the day and age now where you can’t sit back and wait for your statements 30 days from now,” he said. “You have to be very proactive. … If you have a process in place, maybe (businesses and consumers) should be looking — once in the morning you check your account and the activity and then you check it at night before you leave — that way if something does happen you can catch it and shut it down before it implodes.”

Most financial institutions offer fraud prevention services that allow them to monitor activities and set limits and parameters. If anything looks suspicious, the bank can stop the transactions early so they do not reoccur. If an individual or business is a fraud victim, they provide educational services on how to move forward and protect their assets in the future.

There are a number of mistakes Bulson sees consumers and businesses make when it comes to fraud prevention. He encourages folks to not use public Wi-Fi because malware can get embedded on devices this way. Consumers should be updating their monthly security patches on their devices as well as having different login names and passwords for every account. This way only one account is affected instead of a large number. Bulson believes businesses should have an IT department that periodically checks their security infrastructure.

The largest mistake Bulson sees businesses make is having no process in place at all to monitor financial matters. “Something will get lost in the sauce and six months later they will do a reconciliation and say ‘Hey these checks — we did not write. That is not our signature,’ ” he said. “You have to have a process in place in your business for monitoring and inspection.”

Businesses also need to assess how much autonomy they give employees regarding financial matters. He has seen companies give full control to one employee with no oversight.  In several cases, “bookkeepers have taken advantage of their employer and have done horrible things and stolen large dollar amounts because no one is watching the books. (With oversight) you’d catch a lot of this stuff. Maybe it is 30 days behind but it is not six months behind and it isn’t a million dollars later.”

Companies also believe fraud won’t happen to them stating “we don’t do the things that other businesses do.’” Bulson notes “the crooks are looking for every weakness. It is about prevention and being smart and knowing that fraud is out there.”

While many businesses are struggling to survive due to multiple factors including recovering from COVID-19 pandemic lockdowns, supply chain issues, labor shortages and inflation, Bulson said they need to stay vigilant against fraud. “You can’t forget about the other side because you are going to have all of what you do make a run out the back door,” he said. “If you don’t take these steps now, all of the sudden you have taken a loss and the loss is going to impact your bottom line even greater.”

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