Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Running a business comes with the risk of you or your customers becoming victims of fraud or identity theft. Fraudsters use many tactics to swindle businesses, including fake identities and stolen payment cards. This is a crucial problem to tackle because it can cost you dearly. These losses can be financial, and reputational, and can come in other forms.
If fraudsters use fake ID documents and stolen payment cards to purchase items from your business, the real owner of the payment card may request a chargeback, which may affect you. Unfortunately, the authorities may not be able to trace the fraudster since they used a fake ID. To avoid being a victim, we recommend you try the following tips:
Fraudsters are good at creating fake ID documents that look convincing to humans but can be detected by ID verification software. Using this software will ensure you are only dealing with legitimate customers and reduce your risk. If you have a passport scanner or other ID verification software, you can use it to spot fake IDs and stop fraudsters in their tracks.
Proper training helps staff to detect the signs of identity theft so they can take extra precautions when dealing with customers. They should also learn how to deal with a case of identity mismatch responsibly, in case there are false positives from the verification software. This will reduce fraud while preventing the disenfranchisement of legitimate shoppers.
It’s recommended that you only use a secure payment processing API to facilitate your purchases to prevent identity theft. Cybercriminals often attempt to hack payment APIs to steal the payment information of customers. Without adequate safeguards, your business will be at risk and can suffer serious reputational damage.
You should set up a fraud detection system that monitors all transactions and notifies you or your staff when a shopper makes an unusually large purchase. The system should require the shopper to authenticate their identity before proceeding. This system will catch fraudsters who steal people’s information to purchase items they can later sell offline to redeem cash.
Online fraudsters commit cyber attacks on business websites to steal consumers’ data. You should limit the amount of personal information you collect from your customers and the amount of time you store them. This will limit the damage a successful attack can cause since the cybercriminals will not have access to a significant amount of consumer information.
The consumer-related data you store on your business website should be encrypted so it is useless to any authorized party that accesses it. By doing so, you will prevent your customers’ identity from being stolen and abused by hackers and fraudsters.
Identity fraud is unfortunately rampant in the business world, so it is in every entrepreneur’s best interest to safeguard their company and consumers from it. The tips outlined above will protect your business and prevent the financial and reputational losses that come with successful attacks. These losses can lead to your business closing especially if consumers no longer trust the safety of your brand.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.