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Cyberfraud Causes Small Businesses to Lose Big

Cyberfraud, an all-too-common phenomenon these days, causes major headaches for any victim. But whereas banks provide protection for individuals who lose their money to cybercrooks, small businesses aren’t afforded a similar safety net.

A recent article in USA today details how small companies lose big as a result of cybercrime. Individuals who experience cyberfraud are assured certain defenses to prevent major losses. Typically, if you report a stolen credit card immediately, your financial loss is capped at $50. However, this same scenario does not hold true for commercial wire transfers committed illegally.

A Missouri dental practice called Smile Zone received a rude awakening when cybercriminals, using money mules, stole $205,000 from the company’s bank account. As the employees at Smile Zone soon discovered, small to mid-sized businesses don’t receive the same protections as consumers do when cybertheft occurs. The business manager of the dental practice contacted the FBI but was told that the agency won’t open a case for a theft under $500,000. Instead the case has been lumped in with several others, and – to make matters even worse – it remains unlikely that the money mules who participated in the attack will be prosecuted.

Cybercriminals are increasingly targeting small to mid-sized businesses, leading to annual losses ranging from the hundreds of millions to billions. According to Bill Conner, the President and CEO of Entrust, the situation is as such: “We are in an arms race with sophisticated, high tech enemies who are now concentrating on smaller business bank accounts in addition to their continued efforts to steal from large corporations.”

To combat the risk, Conner suggests that small businesses instill a “triple-threat” security package that includes: Authentication, fraud detection, and out-of-band transaction verification and signing for high-risk transactions. Other recommendations (applicable to any consumer) include updating all security patches and investing in premium antivirus software. There’s also a handy smartphone app, called “IdentityGuard Mobile,” that alerts you of suspicious account activity and requires you to authenticate the transaction before the transfer goes through.

Whether you’re an individual consumer or running a small business, remember that fighting cybercrime requires proactive measures against potential threats and adherence to common online safety practice.

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