Fraud, Hacks, and Data Breaches: Here’s What Small Business Owners Need to Know

The first step in protecting your business from fraud, hacks, and data breaches is to recognize that you are, in fact, a major target. More than half of malware attacks, for example, are aimed at small businesses. Often small business owners “enjoy a false sense of security, assuming they’re too small to attract the attention of hackers,” according to Entrepreneur. This thought process is not based on the facts and can be dangerous.

Developing a solid strategy for cyberattacks means knowing what you’re up against, having a plan to recover from an fraud or a data breach, and taking measures to protect your company. Here’s what you need to know.

Fraud, Hacks, and Data Breaches

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How Am I Vulnerable?

You don’t have to be a high-tech company to be vulnerable to cybercriminals. If you use email, have any important data stored on hard drives or the cloud, and use passwords to protect your accounts, then you can fall victim to a data breach or cyber fraud.

It’s a fact: Very bad actors want to steal your data. They want to hold it hostage and demand ransom. They want to lock up your computer systems with malware and force you into a cycle of payment to restore your data and functionality. They do this by either breaking into your systems the hard way — through brute force — or by exploiting weaknesses in you and the people who work for you through phishing attacks.

In short, if your IT security is actually insecure, you are at risk. However, even strong cybersecurity cannot protect against the kind of fraud and social engineering attacks that involve getting people to willingly hand over their information.

A Deeper Look Into Social Engineering Attacks

The vast majority of your company’s risk comes from social engineering attacks — 91 percent in fact. Succinctly put, social engineering attacks employ tricks that most often involves digital communication (like email). The trick is to get someone to either hand over sensitive information or unknowingly install malware or ransomware on their system.

Phishing is by far the most common form of this. Most phishing is executed via email, but nowadays, more and more criminals are using text messaging and social media to trick people into spilling their data secrets. Some phishing messages will purport to be from the IRS or your bank. Others, meanwhile, will imply they are from another company you work with or from your actual IT team. Included in the messages are links that, when clicked, automatically install malware (viruses) onto your system. The type of malware varies. Some of it will root into your system and steal data. Other types — specifically known as ransomware — will hold entire computer systems hostage and demand a ransom to unlock them.

In rarer cases, cybercriminals may simply ask you for usernames as passwords, claiming to be someone you know, your bank, Facebook, or any other entity with which you have accounts. As you can see, the tricky part about social engineering attacks is that they cannot be stopped with good cybersecurity; it’s not a brute force hack. They can only be prevented through due diligence on the part of your employees.

How You Can Protect Your Business

The best way to deal with a data breach or instance of fraud is to prevent it altogether. Easier said than done, of course, but you can make yourself far less likely to become a victim if you focus on protection and education.

The buck stops with you and your employees. Training them on the dangers of cyber attacks, what to be on the lookout for, and how to avoid accidentally giving up sensitive information is the number one way to prevent a catastrophe.

Here are some rules you should set immediately:

  • Do not open emails from unknown sources.
  • Do not download attachments from people you don’t know. Every attachment should be run through malware detection software before opened.
  • Never give usernames or passwords to anyone without explicit permission from you and your security team.

Your company should also perform a company-wide password reset every few weeks to prevent hacks. Another company policy should be the backing up of data onto hard drives disconnected from the internet. This will help you recover any lost data in the event of an attack. You can also hire third-party services to conduct mock data breach attempts to test your employees.

To be extra safe, you should also consider hiring cybersecurity experts to perform an audit of your company’s defenses to help you shore up any weak points. You should also make sure you have valid programs for the four main areas of data protection: firewalls, anti-virus software, malware detection, and encryption. If not, it’s time for an upgrade.

Finally, your business should enforce restrictive data permissions. We haven’t yet touched on this, but data breaches do occur when employees — whether former or current — act with malicious intent and steal or leak sensitive data. It’s rare, but it does happen. Help mitigate this threat by ensuring employees only have access to what they need — no more and no less.

What to Do If You Get Hit

If you happen to suffer from a hack or data breach, then you must immediately enter recovery mode. Your small business can survive this, but you need to be decisive and smart in the immediate aftermath. If you’ve suffered data loss, call in a data loss specialist. Disconnect your storage drives from your system — it may be compromised. Immediately shut down and review employee clearances and re-secure your accounts with new logins and passwords.

After that, it’s all about damage control. Notifying your customers and clients that you’ve suffered a data breach is tough, but it must be done in a timely fashion. This is how you’ll come out of this with your reputation — and business — intact.

Sure, there is plenty of financial damage that comes with a major security breach — anywhere from a few thousand dollars to millions, depending on the size of the company and the severity of the breach. The total cost can be even greater once you factor in things like lost customers/clients, the hit to your business’ reputation, and costs to recover lost data. That’s why having a plan in place is so vital. Focus on employee education and put an emphasis on stopping cyber attacks at their nascent stage.

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