Contrary to popular belief, while business bank accounts are protected by the Federal Deposit Insurance Corporation similar to personal accounts, business accounts do not receive the same protections from fraud. Banks are only obligated to provide business account holders with a “commercially reasonable” standard of security—a standard for which no federal framework exists. That means that if a business account is hacked, that bank is under no federal obligation to reimburse any stolen funds.
Because of this lack of legal protection, business bank account owners stand the risk of losing everything should their accounts be wiped out from fraudulent transfers. Cyber criminals hack into accounts through stolen passwords or send phishing messages to employees asking for funds transfers. Or, they are able to directly acquire an employee’s laptop or mobile device. When successful, the criminals vanish along with the rightful account owners’ funds.
Business account owners, particularly those of small businesses, should be protected against would-be cyber criminals on both digital and physical fronts to ensure their funds are fully protected. And with more than 8,000 companies having been victimized in the last two years for loses near $800 million, businesses cannot afford to overlook taking appropriate security measures.
To protect your business bank accounts:
- Educate employees about the dangers associated with cyber fraud
- Protect your Internet connection with firewall security
- Implement virus protection software to guard against malicious intrusion
- Secure available Wi-Fi networks
- Update software regularly and limit software installation authority
- Change passwords frequently
- Control and limit access to computers and network components
- Dedicate a single computer for financial transaction use only
- Back-up important data
- Require individual user accounts for each employee
- Review account statements carefully and regularly; inquire about suspicious charges
- Use tamper-resistant checks
- Limit the amount of information on checks
- Store new and canceled checks in a safe location
- Avoid sharing personal identification information that could be used to identify yourself to financial institutions on social media
- Be aware of vulnerabilities associated with mobile and online information transfer and storage