At Rowdens, we always advise our clients to reconcile their bank accounts regularly - you may not be aware that direct debits can be set up without checks that the bank details do actually belong to the customer!
The wrong bank details can be given and the DD subsequently set up with transactions occurring until bank statements are checked and the activity brought to the account holder's attention.
No-one is off limits and highlights just how important it is to stay on top of your bank transactions. To help you protect your business, here are five key actions you can take:
5 steps to protect your business from fraudulent direct debits:
1. Regularly reconcile your bank accounts
This helps you catch unauthorised payments quickly before they cause bigger issues.
2. Set up bank alerts
Enable notifications for new direct debits and unusual transactions so you can act fast if something suspicious occurs.
3. Use strong online banking security
Ensure you have robust passwords, activate multi-factor authentication, and be wary of phishing scams - they are incredibly convincing now and can appear totally genuine.
We know of an instance when a bookkeeper posted and paid a phishing invoice which nearly broke the business owner. Ensure a process of invoice approval which includes segregation of duties.
4. Verify all direct debits
Before approving any new direct debit, confirm the details with the company requesting payment.
5. Act fast if you spot fraud
Contact your bank immediately to cancel fraudulent direct debits and report the incident. They will immediately refund the DD that has been taken and then investigate. However, be aware that charges may be incurred if you are found to be mistaken.
And finally, as Jonathan says:
"Please do keep reconciling your bank accounts on a regular basis – it could save you money!"
If you have any concerns about protecting your business from financial fraud, get in touch. Also look out for more phishing blogs in the future - we’re here to help!
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