Protecting Your Business From Online Crooks

How to beat online fraudsters at their own devious game.
Magazine Contributor
2 min read

This story appears in the March 2007 issue of Entrepreneur. Subscribe »

Startups are prime targets for online thievery. Do you know how to protect your company? "First, identify those systems that you depend on most," says Paul Kurtz, COO of Good Harbor Consulting, which provides cyber security advice. "Then you can focus your resources on making sure those systems are the most protected and resilient." Security software and anti-spyware programs with the latest updates are essential. For more help, check out the Cyber Security Industry Alliance, the National Institute of Standards and Technology and the U.S. Chamber of Commerce's security guide for small businesses.

John Buckman, founder of Magnatune.com, an online record label and music retailer, has been fighting online fraudsters ever since his 2003 launch. He's observed two kinds of thieves: the traditional ones who only want something for free, and the hacker types who view online fraud as a game and consider getting around security systems a challenge. "The only way to win with [the second type] is to get them bored," says Buckman, 37. Set up a security filter that marks suspicious activity, and have an actual member of your staff check it out. But when you suspect fraud, don't let thieves know it immediately. Let them think their order was received, and they will get bored. Later, investigate with a nice e-mail to the customer questioning the order. Real customers will be eager to solve the issue quickly; thieves won't, Buckman says. That strategy has helped him build his company to annual sales of nearly half a million dollars.

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