Nowadays, businesses are aware that cybercrime is on the increase and the number of frauds occurring in the business world is at its all-time high. Cybercriminals are becoming more inventive when it comes to stealing accessible or vulnerable financial information. They’re targeting both individuals and businesses, and the cost for businesses can often be high. According to this year’s statistics, 46% of U.S. citizens have fallen victim to credit card fraud since 2012. Last year, losses were estimated at about $24 billion, a 12% increase over the previous year.
Besides losing money, falling victim to fraud has other consequences that are more difficult to mend, such as having your reputation ruined. Thus, businesses that are looking to fight online fraud first need to understand today’s fraud landscape, as well as the tools for improving customer convenience and security. These are some of the methods that will give noticeable results.
It often happens that a fraud isn’t a result of some malicious scam or a hack. Sometimes, a client can choose a weak password when signing up to your website, pin it to someone they shouldn’t have, or blurt it out. Even though that is not your fault and others are to blame, they might turn some of their anger towards you, resulting in bad publicity that will knock down your reputation.
The first step towards increased security is raising the awareness of how important it is for them to choose a strong password and keep their personal info from other people’s eyes. How can a stronger password policy be enforced? Hackers will easily guess your child’s nickname, your pet’s name, your mother’s maiden name, or your birthday. What makes a password strong is the nature of characters used (letters, uppercase, lowercase, numerals, etc.) in the password.
It’s a good idea to identify your customers by name, email address, telephone number, delivery and billing address. Having your servers record the IP address from which your customer is accessing your system is also helpful. Store this information in your database along with the details of your customer’s ordered goods (basket contents). This will help you close loopholes in your system because cybercriminals will target a business until it closes the window of opportunity.
A good security system works best when it’s unnoticeable. On the one hand, your customers won’t be thankful for their credit card not being compromised, while on the other, they are bound to notice losing half of their assets due to a security breach. You should make sure you have achieved PCI DSS compliance, because customers will stop to consider your business’ safety protocols before doing business with you. Complying with PCI DSS (Payment Card Industry Data Security Standard) is a requirement for any organization that stores, processes, and transmits payment card data in order to ensure data protection around online financial transactions.
The reality is that no one can be completely fraud-proof, which is why we come to an issue known as an acceptable level of fraud. Many people claim that a 50-60 cent loss on $1,000 seems to be acceptable. However, when you look at the bigger picture, things don’t really appear so. Your business’ reputation can go down in case of a single major loss of your client’s assets. Thus, there’s no such thing as an acceptable level of fraud if you want to survive in the business world. If it does happen, offer a compensation, a full refund, or anything to deal with the issue before everything goes public.
The fact that there’s no system that will completely protect you from online frauds shouldn’t make you stick your head in the sand. By implementing a fraud prevention plan, you can protect your business and your customers, and focus on growing your business. Encourage your customers to have a conscientious attitude, and do whatever they can to ensure higher protection from fraud (create stronger passwords and keep their personal data a secret). On the other side, by implementing various tool and security protocols, you’ll minimize the potential damage that may happen in case of a fraud.