Protecting Your Factoring Company From Cyber Fraud – Proxy Servers

factoring company cyber fraudAs technology gets more advanced, so do cyber crimes; so how do you protect your factoring company from becoming the next victim?

In today’s world, doing business with customers Nationwide has become much easier, thanks to the Internet. With the advancement of technology, comes new threats. As more business is done online, the less face to face encounters you will have with prospective customers. If you are a factoring company, operating in one office on the East Coast, it’s not very likely that you will be flying to the West Coast to meet a new potential customer. It’s more likely that most/all communications will be through, emails, web forms, text messages, chats, phone calls and a host of other online methods of contact. With that said.. How do you really know who you are communicating with?
Before we go into how to protect you, we need to know what to look for and how cyber thieves are targeting your company.

For this Article, we are going to focus on Proxy Servers. In upcoming articles we will cover additional methods on how to protect your company from cyber theft.

  1. Proxy Servers
  2. Google Phone Numbers
  3. Who-is Database
  4. Email Look-up
  5. Pre-paid Cell Phones
  6. Domain Name Searches

Proxy Servers – What Are they and how do they work?

A proxy server is a computer that functions as an intermediary between a web browser and the Internet. A Proxy server improves web performance by storing a copy of frequently visited content from webpage’s and places it, in its cached memory. When a browser requests a webpage, where previous data was once accessed, the proxy does not need to download this information again, it’s already stored, so when displaying a webpage, the page will load faster. A proxy improves security by filtering out web content that contains malicious software, protecting a company’s network.

Proxy servers are used mostly by larger companies; they are not typically used by home users or small offices that surf the web.

Proxy servers also have the ability to change your computers IP Address and this is where the trouble begins.

If you are on your home computer or in a small office, your IP Address is assigned by your internet provider. This IP address can and will trace you back to your physical location, so if you are surfing the web, where a company is tracking your IP address, your location will be captured. If you install a proxy (though a free app on your browser), your IP address will be masked, so you can no longer be traced to your true physical location. The IP Address will show that you are at a fictitious location; another state or even in another country.

So… what does this mean to you and why should you be concerned?

Suppose a potential customer goes to your website to complete a factoring application and let’s also assume that your web application captures the IP address of this potential customer or let’s say you send out your factoring agreements via a digital signature company (like DocuSign). When your customer digitally signs the agreement or completed an online web form, their IP address is captured (real or fake). In the event that your potential customer is out to defraud you, you have now accessed their IP, but if they are using a proxy server, their IP address that you captured, will show that they are in a different location (assuming you trace the IP address), other than where they really are; in essence, they have become invisible.

If you are not collecting IP Addresses on your web form and if you are not using digital signatures when sending out your agreements, you will need to embrace the change and adapt to new methods, in order to protect your company.

You now have captured your prospective customers IP address, now what?

Now we you need to determine if your prospective customers are using a proxy. The simple solutions is… more technology. Protect your online applications by adding a script to your web forms. When a prospective customer, submits an online web form, this script will run and verify if the IP address came from a proxy. When you received the web form, it will tell you if a proxy was used and if so, this should be a red flag. If someone is using a proxy server, this does not mean they are looking to defraud you, but it does mean you should dig deeper, before making a financial decision. If you trace an IP address and it shows they are located in Arizona but on their application, they put down their office address of FL, something is wrong, proceed with caution.

How do you Trace an IP Address?

There are many websites that allow you to trace IP addresses, but you can used this one here, to save yourself some time http://ip-lookup.net/index.php. If you go to this address and enter in the IP address that we captured from the web form or your digitally signed agreement, it will show you who their internet provider is and the location of that provider. If your customer claims to be from FL, but their internet provider is in CA, there’s something wrong, proceed with caution. If the host name, upon running your query is unknown, proceed with caution.

Why is this Necessary For Factoring Companies?

It’s simple, if a potential customer is trying to mask their true identity, is this someone you want to give money to? Why wait until the final verification steps to determine if there is fraud or not? Detecting potential fraud from the application stage, will save you time and protect your money.

Divino alliance one factoringAbout The Author: Joseph Divino is the director of business development for Alliance One LLC, we are an invoice factoring company, located in New York.

For more information about how our company can help your company; please visit our website at www.AllianceOneLLC.com or contact me directly at jdivino@allianceonellc.com

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