There are nearly $600 billion stolen each year from businesses. While a large number of that total is from small businesses that do not have the ability to handle high-end security of finances, many of the businesses fault to have any form of quality fraud protection.
A new survey from the Bank of the West stated that while it was true that 95% of the small-business owners who have taken steps to protect their companies, few were actually using proven effective methods.
“Small businesses are particularly susceptible to fraud because they have fewer resources. Yet, the impact of the resulting losses is usually much greater than for larger businesses,” said Michelle DiGangi, executive vice president of small and medium enterprise banking at Bank of the West.
The survey noted that 40% of small businesses conducted background checks, while 18% have two-person controls established. Neither number is a high enough total to make sure the majority of businesses are safe.
Nearly a third of all small businesses have data-security policies, which leaves 66% without such and defense mechanism. That number is concerning considering that 56% allow employees are allowed to work from remote locations, which makes information from the company more vulnerable.
The National Federation of Independent Businesses noted that 30% of employees steal, with an average of $4,500 stolen by the end of a tenure at a company. With nearly one in three employees being dishonest, fraud and theft have likely hit most businesses owners one way or another.
Another 64% of business owners state they know of other businesses that have been affected by some form of fraud, with nearly 25% saying they have been victims themselves.
It may simply come down to ability to afford the service, but many small businesses seem to keep their heads in the sand when it comes to fraud. Nearly half of all small-business owners state their insurance policies do not cover any form of employee dishonesty, while one-in-five say they are unsure if their policy covers fraudulent actions.
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