Fraud, Theft, Breach: 10 Key Security Lapses Threaten Small Business

If you think shredding papers and password changes are enough to protect the privacy of your small business, think again. Geoffrey Arone, the co-founder of SafetyWeb.com, a consumer privacy watchdog group and consumer privacy protection agency, says small-business owners face real security threats every day. He offers advice on the most urgent.

Data breach resulting from poor networking choices: Cisco. Sun. These are enterprise-level networking choices that are found in large IT departments around the world. The price tags, however, price small or medium-size businesses out of the market. If these businesses have networks at all, they may use networking devices targeted at home users. Some may forgo the use of routers at all, plugging directly into the Internet. Business owners can block most threats by using a quality router, like a Netgear or Buffalo brand router and making sure to change the router password from the default.

Data breach resulting from improper shredding practices: Dumpster- diving identity thieves target businesses that throw out paperwork without shredding it. Most home shredders will suffice for small businesses in a pinch, but a commercial shredder is a wise investment if private information is printed and shredded daily.

Identity theft resulting from public databases: Individuals, especially business owners, often publish lots of information about themselves in public databases. Businesses are registered with the county clerk, telephone numbers are in the phone book, and Facebook profiles offer addresses and dates of birth. Many identity thieves can use information searchable publicly to construct a complete identity.

Identity theft resulting from using a personal name instead of filing a DBA: Sole proprietors that do not take the time to file a “Doing Business As” application are at a far higher risk of identity theft due to their personal names, rather than their business names, being published publicly.

Tax records theft around tax time: Businesses must ensure that tax returns are dropped off at the post office and refunds are collected promptly from the mailbox. Identity thieves often steal tax returns from an outbox or mailbox.

Bank fraud due to gap in protection or monitoring: Business owners know that it is vital to balance their accounts every month to ensure that checks are not being written out of business funds by embezzlers, but many businesses rarely, if ever, check what kind of credit accounts have been opened under the business name. Monitoring services like myID.com can alert business owners when new credit accounts are opened fraudulently.

Poor emailing standards: Many businesses treat emails as confidential communications, but this is far from the case. They are available to a number of people other than the recipient. It's more appropriate to treat emails as postcards, rather than sealed letters.

Failing to choose a secure password: In fact, many security experts are recommending the use of a pass phrase, rather than a pass word. Pass phrases are several words long, at least three, and are far more secure than passwords. A pass phrase like "friday blue jeans" can be typed far quicker than a complicated password, and it doesn't need to be written down on a Post-it.Not securing new computers or hard drives: Businesses that had their IT system professionally installed may opt to upgrade a computer or two by themselves. This is strongly discouraged on a business network, as new computers must be professionally secured or else they pose a serious threat and an entry point for hackers.

Social engineering: Social engineers are individuals that call and claim they are from another organization. They may even claim to be with a firm that a business owner does business with. If someone you do not know calls on the phone, be sure that it is the person you think it is before revealing passwords or confidential information.