Safeguards for small business against online account theft

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RIP-OFF ALERT: Small businesses that do online banking are being left high and dry by the banks when they suffer online theft.

If you’re a small business owner, your bank does everything it can to encourage you to do business banking electronically. But, if a hacker somehow breaks into your online account and there are great losses, the bank essentially says “tough.”

As a small business, you don’t have an IT department — and the online crooks know it. So they’re targeting you. BusinessWeek reports that small businesses are cumulatively losing $1 billion each year to cyber-crooks.

I have a simple two-step procedure to safeguard businesses with 25 or fewer employees (As companies grow beyond 25 employees, I’m out of my league with giving advice.)

  1. Have a written policy about how you safeguard your funds both online and physically. Whatever you’re doing, write it down. (For example, you might write down that you have any checks locked in a file cabinet or safe.) By having a written policy and following it, you show you’re taking “due care” under the Uniform Commercial Code, which will help you should you need to sue your bank over the breach.
  2. Buy a dedicated computer and use it only for online banking. Never use that computer for any other purpose. (Put this measure in your written policy as well.) With laptops starting at less than $300, this is the cheapest insurance policy I can recommend.
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