Today, most of the scams reported in the news that are targeted against businesses seem to have gone high tech and usually involve illegal hacking into a company’s computer network. However, some fraud still occurs the old fashioned way – over the phone. Unfortunately, Apache Corp. was recently reminded of this. The company reported that it was scammed by impersonators who tricked Apache employees, via phone (and email), into rerouting vendor payments to a fake bank account.
Apache had a $10 million computer fraud policy with Great American Insurance Co., but the carrier is refusing to pay for the $2.4 million in losses because the deception involved telephone conversations and was not entirely online. The parties are now in litigation.
As a business person, you are very focused on cybercrime, and it is certainly a rapidly growing problem. But, this case brings up an interesting reminder – scams can still occur offline, and you must be prepared for scams, no matter what form they take. Here are some suggestions to keep in mind:
Be Aware and Prepare - Scams can originate from any source. Indeed, there are many creative ways to defraud a company that do not involve a computer. Carefully examine where your organization might be vulnerable, and develop a plan to strengthen and improve each area.
Train Your Staff - As is usually the case, employee training is critically important. Make sure your staff is properly trained on how to identify a potential scam, as well as how to react quickly and effectively if they do identify a problem. Quick action can often eliminate a larger problem later.
Evaluate Your Insurance Policies - Look at your insurance policies. Do they only cover computer fraud? A good policy is comprehensive and protects your company no matter where the fraud originates. Make sure yours is up to date and encompasses all sources of fraud.
Even in the cyber age, a business is still at risk of a traditional phone scam. Make sure your organization is prepared for the threat of fraud – cyber or otherwise.