An increased number of small businesses are falling victim to fraud. And as two Sarasota, Florida entrepreneurs recently learned, this can lead to permanent losses that are often difficult to recover from.
Joyce and Stan Fox, who run a home-based promotional products company, lost $10,000 from their business account due to fraud this year. It started in February when a fraudulent transfer of $20,000 from their bank account was stopped. However, the fraudsters tried again, the next time transferring $10,000 to their own account, which was ultimately successful.
When the first transfer was attempted, Fox’s bank notified them that someone was accessing their account and sending money with Zelle. The bank also froze their account and asked them to come in. However, the second transfer was able to go through before the account froze. And since the bank has not been able to recover the funds, the Foxes were notified that they won’t be getting their money back.
For a large corporation, $10,000 may not be a huge sum. But to a small business, this type of loss can lead to major struggles. For example, the Foxes had already allocated $5,000 of that money to sales tax and payroll, which they still owe and aren’t sure how to make payments now.
Joyce Fox told WFLA, “All of a sudden you find that somebody can have access to your account and they can take your money and you don’t get it back. It’s unheard of to me. It’s unfathomable to me.”
Unfortunately, the Foxes’ story is becoming more common. Financial institutions across the U.S. are experiencing an increase in fraud attacks, with customers losing nearly $10 billion in 2023.
There may not be a way to completely eliminate this risk. But small businesses that are aware of the increased rate of fraud can take steps to protect themselves. For example, you might contact your bank to learn about fraud protection options or check accounts more frequently. Staying diligent may ultimately help companies prevent losses that can negatively impact operations for years.
Image: Envato
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