How does fraud impact small businesses? What are the most common types of business fraud? And how can a business owner help protect their business from fraud? With business fraud on the rise, it’s becoming not a matter of if a business will be targeted – but when.

In this episode of Financial Cents, Katherine Cobb, senior vice president, manager of the Cybersecurity Operations Center at Zions Bancorporation, joins host Brent Cannon, executive vice president, director of community banking at National Bank of Arizona, to discuss the impact of business fraud, how the most common types of business fraud work, and what business owners can do to help protect their businesses. Because according to Katherine, small businesses make ideal targets for fraudsters since they often don’t have the resources or controls in place to protect themselves.

Many of the most common types of business fraud we see today are designed to exploit our reliance on digital communication. Business email compromise is where a fraudster impersonates a business’s vendor and sends the business updated payment instructions so the business wires their money to the fraudster’s account. Another common type of fraud is CEO fraud, which is when a fraudster impersonates the CEO or other company executive and emails a low-level employee with instruction to wire money to the fraudster. Other types of fraud that are prevalent today include phishing and spearphishing, vishing, smishing and check fraud.

Regardless of how the fraud is perpetrated, there are things businesses can do to help protect themselves. “The biggest thing I would say is for business owners to put a callback system in place along with a dual control system,” says Katherine. “That way, any payment changes are verified directly with the vendor and there’s always a second employee who can act as a check and balance.” In addition, banking products like Check Positive Pay¹ can also help business owners protect themselves.

Financial Cents, is hosted by Brent Cannon, EVP, director of community banking at National Bank of Arizona. If you have questions or topics you’d like to hear discussed on a future episode, send them our way.