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Expert Cyber-Fraud Defense Tactics You Need Now

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Expert Cyber-Fraud Defense Tactics You Need Now

The primary thrust of this newsletter series is to save on taxes by utilizing smart tax strategies, but what is the point of saving money only to have it stolen from you?  So, occasionally, we have to look at securing and protecting the assets we already have!

One study found that 84% of U.S. Companies reported being the victim of at least one (1) instance of fraud in the last twelve (12) months. Kroll Annual Global Fraud & Risk Report.  86% suffered a cyber-theft, loss or attack in the last year.  33% of companies experienced a phishing or financial-based attack in the last year.

Consider this, in 2015, 2bn people used the internet, and in 2017 that number reached 3.8bn, and is set to double again by 2022 to 6bn plus!!  In just 7 years, internet usage, for business and purchasing, will have increased 3-fold.  It has become the dominant form of commerce in many corners of our country and globally; quickly crowding out traditional retail and other methods of commerce.  Cell phones and apps like Venmo have made it so that you don’t even need to have cash to chip-in when going out to a group dinner.  Cyber solutions are now universal.

In 2017, the FBI’s Internet Crime Complaint Center compiled data on 301,500 consumers reporting cyberfraud attacks which collectively cost more than $1.4bn.  This number is just the tip of the iceberg.  One study by the White House Council of Economic Advisors published in February of 2018, called “The Cost of Malicious Cyber Activity to the U.S. Economy,” found that malicious cyber activity in total cost the U.S. $109 billion in 2016, which would put 2018 numbers closer to $300bn.  Putting that into perspective, that would be equivalent to between 25% and 33% of the total U.S. credit card debt.  The report also found that the average small business experiences 130 discreet cyber breaches per year, each of which could spill over into a cyber event!  Coming up with a good number is hard.  One report found that just credit card cyberfraud for consumers was $1.5bn!  The scope of the problem is so enormous and rising in such a parabolic fashion that you can be virtually certain you and everyone you know who is in business will deal with cyberfraud in 2018 or 2019.

The global cost of cybercrime globally is set to reach $2 trillion by 2019.

One of the more popular scams is for sophisticated cyber criminals to use a “money mule” to steal money from unwitting businesses in a multi-step and nearly untraceable series of transactions.  But, the varieties and innovations in cyber crime are happening so quickly that it is a world of pure imagination.  Someone needs to be anticipating new and creative forms of attack that are meant to circumvent traditional controls.  But, you want to make sure you have at least some of the most basic financial security controls in place.

Suggested Financial Security Controls

  1. Create strong passwords, store them so they don’t need to be keyed, and change them frequently.  Use a password generator, storing system and inputter like 1password to store all passwords across devices to prevent keyword logger hacking.  According to one report by Forrester, about 80% of cyber hacks result from a hacker getting access to user credentials.  Of particular importance is to protect your e-mail password, which is the gateway to all of your other IP assets.
  2. Eliminate “online wire capability” since it can be easily hacked.  The instances of these attacks is on a steady and constant uptick and occurs primarily through spoofing scams.  Tens of billions of dollars are being lost through these scams which follow a few formulas such as infiltrating your e-mail and asking clients to send wires to a changed address, or by using your login credentials to do the same with a bank official, or sending e-mails to a bank official to verify a fraudulent transfer a fraudster has initiated.  The combination of getting bank login credentials (see advice directly above) and having e-mail access is a potent weapon that fraudsters use to take your money, especially if you have wire capability set up online.
  3. Do a “website vulnerability audit.”  What would it cost you if your website went down for a week?  This is the kind of malicious, DDoS malware attacks can be devastating.  If you don’t own your website, get website ownership and back-up your website.  If your website goes down, it could take years to re-assemble the data and the investment you’ve made in your website.
  4. Protect your social media, and minimize logins through your Facebook or Gmail account, because if someone infiltrates the password to these systems, they can then access all linked accounts. Consider these statistics:
  • 6 billion email accounts
  • 2 billion Smartphones
  • 1 billion Apple users
  • 1 billion Gmail accounts
  • 1.8 billion Facebook accounts
  • …and 300 million Twitter accounts who tweet 7,350 times per second, send 2.5 million emails per second, and transfer 1.5 billion GB of data per day through the internet.
  1. Use your cell phone as a mobile hotspot rather than using public WiFi.  Public WiFi puts you seriously at risk of an intrusion and hackers love to go to public places to gain access to otherwise secure systems by getting into your computer over unsecure channels.

Category: Tax

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