The Small Business Guide to Preventing Online Fraud

Both identity theft and the online fraud that results from it can be costly to small businesses where every dollar does count. It’s important to not only use software and reliable systems to prevent as much fraud as possible, but to act swiftly should fraud occur to stop its continuance and where possible, prevent it reoccurring.

Here’s a guide to help small businesses navigate online fraud with a strong focus on prevention.

Data Breaches

A data breach happens when company databases suffer an intrusion. This can be externally through a website or internally with an employee or third-party contact gaining access to confidential customer data and later selling it to the highest bidder on the dark web.

The information stored can include customers’ names, addresses, social security numbers, credit card details and a host of other private information. Once customer confidence is eroded, sometimes it’s impossible to get it back. Therefore, it’s necessary to keep a strict control over which employees have access to customer information.

Also, restrictions must be in place to prevent the copying of data onto USB flash drives or other storage devices. Even taking photos of customer information off a computer monitor must be prevented.


Phishing is where a fraudster poses as the company and requests confidential information, usually by email. This is so that they can access the customer’s account.

It’s important that companies report any notification of phishing emails to the appropriate authorities. Communications over email must be done in a consistent, specific manner that’s quotable back to the customers, so customers know if an email contact is really from the company.

Look at offering secure online messaging or live chat on the company’s website as a reliable, electronic way for customers to talk directly with the company.

Brand Protection

Full brand protection using software that provides a suite of useful tools is a first line of defence for Australian corporations. FraudWatch International provides digital brand protection that includes preventing vishing, phishing, malware, the threat from mobile apps, and outright abuse of the brand.

For companies that need a comprehensive solution to online threats, using a single package has a lot of merit. This is because many of the problems with online fraud originate from attacks into the company such as malware infections or intellectual property theft.

Performing Basic Checks

When taking on a new customer, it’s sensible to perform some basic checks to validate their identity and authenticity.

An online search can be performed on their stated address to determine if it’s a real address, a commercial one or a non-existent one. Compare their rough location based on the IP address used to see how closely it matches their stated address. Bear in mind that they could be ordering an item from work in which case it won’t match an address on a personal credit card, but it’s still worth consideration.

Look up the email address and other information provided in Google to see if anything pops out for a previous fraud using similar information. Also, set a limit for how many times their payment method can be declined and/or the number of different payment methods they can attempt to use.

By performing sensible checks on new customers, running software to prevent data breaches and protecting against fraud, smaller companies in Australia can protect against many of the dangers of online business. 


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