Payroll fraud is a problem that impacts businesses of all sizes. The kind of data used to make sure your employees get paid represents a major windfall for any scammer lucky or devious enough to get access, so you should do what you can to protect your business. That means keeping up to date with the dangers that are often presented by technology.
The use of technology in payroll fraud
Payroll fraud is getting more sophisticated over time. As new technologies emerge, so too do new ways of defrauding businesses. Below are a few ways that scammers are taking advantage of common technologies in order to defraud your payroll department and cost your business money.
Email phishing
Phishing is a time-tested method of getting personal information from individuals and a well-known way to get important information from companies. A relatively new scam involves a scammer posing as a high-ranking member of the company’s leadership in an attempt to get banking account information from employees, but not all phishing scams have to rise to even that minimal level of sophistication to catch some employees. So long as your workers have public-facing email accounts, there will be phishing attempts. The only way to stay safe, then, is to make sure that they understand what phishing is and how it works.
Phishing attempts always involve the manipulation of individuals’ trust. Some phishers seek to get information in the first email, while others might build up a relationship over time. No matter what the case, your employees must be on the lookout for warning signs and know never to communicate personal information via email.
Personal information sharing
Some scammers are a little more sophisticated than those using phishing schemes, but they’re still trading on the same basic impulses. There are plenty of technologies out there that can scan social media profiles from personal data, leverage app tracking data to gain addresses, or even follow the trail of credit card receipts, but the truth is that all of these attempts really go back to the same basic problem – people who are not careful with their personal information will get it stolen.
It’s always a good idea to look at the vulnerabilities created by the new technologies that are used by your business. If it seems like there’s a chance for personal data to leak, you need to inform your employees and start working on an action plan that will help to keep them safe. Taking the time to educate your staff on how this data could be taken and eventually misused is the best way to gain the buy-in of any attempts to keep data secure. Informed employees are less likely to fall prey to the vulnerabilities that scammers tend to exploit.
Data Breaches
There are some technological pitfalls that can impact your entire business at once. One is the ever-present possibility of a data breach, something that has been not only more pressing concern for small businesses lately, but also one of the leading causes of payroll fraud. It doesn’t even take some kind of master hacker or sophisticated software to cause a major data breach – something as simple as a bit of paperwork that hasn’t been fully shredded or an unlocked laptop left at a coffee shop can quickly cause all of your company’s payroll data to become public knowledge.
Malware
Malware can also be a major source of vulnerability for a business. Visiting the wrong website or failing to keep security software up to date can allow this kind of software to worm its way into your business’ computers, allowing outside users to glean data and commit payroll fraud a bit more easily. In fact, malware is a fantastic tool simply because it’s so prevalent and so many users ignore the existence that truly dangerous bugs can sneak in without much fanfare. If your business isn’t keeping its software up to date, there’s a good chance that malware can lead to some major data vulnerabilities.
What you can do
If you are looking to avoid payroll fraud, you’ll need to create a solid plan of attack. Not only will you want to keep an eye on all of the issues above, but you will also need to create a checklist so that you can keep tabs on any developing issues. Below are a few steps you’ll want to take to ensure that your business’ data remains safe.
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Identify anomalies
One of the easiest ways to detect any of the causes of payroll fraud is to pay attention to things that are abnormal. If an employee seems to be logging far too many hours, someone has suddenly changed the bank account information through an unusual channel, or if you suddenly see a spike in the amount of overtime you’re paying out, you should investigate a little more closely. This will allow you to not only take a better look at the causes of these unusual events, but it will help to convince others that your business isn’t an easy target for the types of fraud that tend to fly under the radar.
Educate employees
The best defense against most types of fraud is an educated employee. Because so many types of fraud directly target the most vulnerable members of your organization, it’s important that everyone who works for you understands how fraud can impact them. Making fraud detection a part of your basic orientation is a great idea, as is making sure that you provide refresher courses throughout the year. The more work you put into keeping your employees informed, the better they will be able to help you prevent fraud.
Protect your data
Finally, you’ll want to ensure that your data is protected. This means limiting access to important data, keeping your security software up to date, and ensuring that accessing your data is not worth the effort. The more roadblocks you put in the way of a scammer, the more likely they will be to move on to an easier target.
Author Bio:
Rene Broft has not only lived in Arizona most of her life but has also had a great deal of experience in management for many years now. After graduating from Thunderbird High School and eventually Northern Arizona University in 1990, Rene began growing her business career by working at Dillard’s Department stores as an area manager and associate for 2 years. She ultimately was promoted to becoming a buyer of men’s and women’s athletic shoes as well as children’s shoes, overseeing 13 million dollars in purchases for her area per year.
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