What to do after discovering fraud in your business

Anyone who’s ever had the misfortune to fall prey to credit card fraud, knows that it’s a huge hassle. If you’re running a business, you should be aware that your business may be at an even greater risk of having its financial data compromised, which can have much more serious implications compared to that of an individual consumer.

Unfortunately, even the most diligent business owner can become a victim. When illegal credit card transactions are performed, it is you who suffer the consequences. Not only do you have to foot the bill, but you also have to deal with the loss of potentially valuable business.

While there is no way to guarantee that your business will never be targeted by fraudsters, there are, however, several steps that you can take to minimise the damage and put yourself in the best position possible to recover if the worst happens. If you want to limit the losses and protect your bottom line, it is crucial that you act quickly and follow a responsible process, which will also improve your chances of avoiding liability for the fraudulent charges.

Reducing the damages and protecting your business against further fraud

The following steps can help you keep your business afloat when a card breach occurs:

1. Stop the card and notify your bank immediately

Your first priority should be to contact your bank or credit card provider as soon as possible to stop the card and notify them of the suspected fraud. Many cards can be frozen or deactivated through modern banking apps. Your bank will then ask you what transactions have been made on your account, so be prepared to give them details of all transactions on the card since it was last used. If you notice any suspicious activity online, check your statements immediately so that you can provide this information. Although the bank won’t necessarily be able to track down your money immediately, they can freeze your account and make sure that no more transactions go through.

2. File a police report

Contacting the police and filing a report will help establish a timeline of events and can reveal patterns or commonalities between different instances of fraud. it is important for them to have an accurate record of your dealings with them and to preserve any evidence that may be required for investigation purposes down the line. Having a formal police report may also make it easier for you to get reimbursed for any losses incurred through card fraud if the criminal is identified later.

3. Contact SARS 

You will also need to contact SARS with the information obtained from the police and request for an investigation into the matter. During the investigation process, you need to make sure that you provide as much detail as possible about the fraudulent transaction and those involved. If you have any documentation, such as contracts, photographs, and agreements – provide them with these as well. It’s important to note that if you fail to report the matter immediately, it is likely that your business will be held liable for any losses when SARS conducts an investigation.

4. Inform your clients

You would want to inform your business partners and clients about the situation that has occurred on your end. This way, they may be prompted to check for any fraudulent transactions made through their cards as well. You could send them a message through email, letting them know about the issue and how it occurred. Remember, being transparent is one of the cornerstones of good business practice, so it is important to disclose how the information was obtained and advise your clients on the steps they can follow to protect themselves against similar attacks in the future.

5. Tighten up your online security

The best way to avoid being targeted is to ensure that your website and servers are secure. By changing your passwords regularly and keeping your online security up to date, you can reduce the chances of a hacker gaining access to your financial information. You can claim a loss if you can establish that the fraud was not caused by dishonesty or carelessness on your part. If you have been told that you are liable for charges because of negligence, including failing to protect your personal details, such as your PIN and 3-digit CVV – it is worth seeking independent legal advice before accepting this liability.

6. Monitor your accounts regularly

Finally, it is advisable to check all your bank accounts frequently in order to avoid similar problems in the future. Regularly reviewing your statements and checking if everything is fine will help you identify suspicious activity faster and report it right away, which will save you a lot of time and money when it comes to repairing the damage caused by fraudsters. A scrutinising eye from your accountant every month may also help identify any irregularities in your transactions

As a business owner, knowing how to deal with card fraud will save you time, money, and a lot of frustration, and having a policy of regular checks and balances can serve as a fail-safe if your security measures are compromised.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

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