Is Your Money At Risk?
 By Terry M. Blair

Identity theft, online scams and even employee embezzlement are real threats to small-business owners.

Don’t let the bad guys get to you. Be smart. Be vigilant. Protect yourself. Here’s how.

Be Safe Online
You can’t beat the convenience of banking online. You can transfer funds between accounts, review statements, pay bills and perform other actions with a click of your mouse.

But be cautious. That’s the only way to protect your money and your financial data. Follow these tips.

1. Deal only with secure Web sites. Look for the padlock symbol in the bottom right corner of your browser window. You can click the padlock to see security details.

2. By the end of 2006, all banks must tighten their online security. Most will use multi-factor authentication that requires more than a password and PIN. Many financial institutions are opting for picture recognition. When you enroll for online banking, you’ll choose a unique image and create a label for it. Each time you go to the banking site, you’ll see the unique image and label you chose to assure that you’re at the bank’s secure site.

3. If your banking site offers to “remember your password,” don’t do it. That could give other computer users access to your information.

4. Never send account numbers via e-mail. This applies to banks, credit cards, investment accounts and even the IRS. Financial institutions and government agencies will never ask you to confirm or update your account information by e-mail.

5. Change your passwords regularly.

6. Print copies of all online transactions. File them.

Keep Employees Honest
Don’t make it easy for employees to take financial advantage of you. By following a few guidelines, you can reduce the chances that employees will steal your money.

1. Conduct pre-employment screening for any employee who will have access to your finances. This includes bookkeepers, employees who handle payroll functions, employees who have access to cash registers or petty cash and employees who are issued credit cards in the name of your business.
   
   AFS can help with background screening services from e-Check Online. E-Check Online screens criminal history and motor vehicle reports. The company also provides verification for employment, education and professional credentials. AFS Members get up to 50 percent off traditional market prices for all of these background services.

2. Audit your statements. Review bank, investment and credit card statements every cycle. Make sure you understand every transaction and how it related to your business. If you’re unsure about a credit card charge or a cleared check, ask the employee involved to explain the transaction.

3. Password protect every computer on which you store financial information. Give those passwords only to employees who have a need to know.

4. Get help from an accountant who can help you set up a system of checks and balances for your accounting system. Better to pay for expert advice up front than after a theft has occurred.

Protect Your Financial Identity
The American Bankers Association (ABA) Education Foundation reports that identity theft is one of the fastest growing types of financial fraud.

Once crooks get a snippet of your personal information, such as your Social Security number or business tax ID number, they can run up enormous bills and get multiple lines of credit – all under your name.

To make matters worse, the theft can take months of your precious time to sort out. Restoring your good name won’t be easy, fast or pleasant.

So protect yourself. Take these tips.

1. Order a free copy of your credit report once every year. Go to Annualcreditreport.com and follow the instructions.

2. If at any time you suspect identity theft, order credit reports from the three major credit reporting agencies: Equifax.com, Experian.com, Transunion.com.

3. Shred credit card receipts, pre-approved credit offers and other documents that contain your name and/or account information. Lock up financial documents you must keep for your business, such as bank and credit card statements, tax documents and employee files that contain personal information.

4. Destroy expired credit cards. Cancel and destroy credit cards you don’t use.

5. Unless you initiate a call to a financial institution or government agency, don’t give out account or personal information over the phone.

(Posted November 2006)

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