How to Prevent Online Fraud: Knowledge is Power

How to Prevent Online Fraud

Fraud is a fact of online life. Every year there’s at least one new story about a major fraud ring or security breach that could affect anybody who shops, sells or does their banking on the internet. Although online fraud rises and falls from year to year, it will never disappear. The good news is that, with the technologies and security features available today, it’s not so difficult to operate a strong, secure business.

Quick Figures

  • In Europe, payment card fraud increased in 2012 for the first time in the previous five years.
  • In the UK, Europe’s leading online shopping economy, payment card fraud rose by 3%, but remains significantly lower than 2008 rates.
  • Within the Single Euro Payments Area, 0.038% of funds transacted by credit or debit card are lost to fraud, while within the UK the rate is 0.074%, nearly double.
  • Contrary to popular assumptions regarding high-risk countries, 66% of all online scams worldwide originate in the US, and over 10% originate in the UK.
  • Every year, one out of every four small businesses fall victim to some form of cybercrime.

Since it can be intimidating for a small business owner to know how to keep themselves and their customers safe, we’re here to help. The important thing is to remain vigilant and be aware of who your customers are and what types of transactions move through your web store. On the flip side, you also don’t want to go overboard with your security features by treating every customer like a criminal and risk driving them away.

Whether you have a brick-and-mortar business with an online component or it’s entirely e-commerce-based, here are a few guidelines you can follow to keep you and your customers from becoming targets of fraud:

  • Be in the Know

When doing business online, you need to be aware of the different types of fraud beyond the usual stolen payment cards and identity theft. For example, in pay-per-click fraud schemes, your ad is hacked so that when people click on it they are redirected to a phishing site andyou still getcharged for the click. Stay informed about the latest scams and techniques used by cybercriminals so you know what to be prepared for.

  • Know Your Customers

Enacting a good Know-Your-Customer policy can save you a lot of grief later down the line. It’s not worth the risk to do business with somebody if you haven’t confirmed their identity and that they genuinely exist. Use an address verification system to make sure the customer’s physical address is valid and keep records of all contact you have with customers. For more about Knowing-Your-Customer (KYC) click here.

  • Know Your Transactions

It’s vital to a have systems in place to identify potentially fraudulent transactions. Be vigilant about monitoring the types of transactions that go through your web store so that you can identify and flag unusual transactions (very large, out of character for the customer, originating from an unusual location, etc.) and put them through an extra layer of security.

  • Know Your Credit Cards

Most credit card fraud occurs during card-not-present transactions. When accepting credit card transactions, practice due diligence such as making sure the card’s country and issuing bank match the customer’s information and use additional layers of security such as MasterCard SecureCode and Verified by Visa.

  • Know Your Shipping Methods

Secure your shipping methods with postal insurance and tracking services, and use a courier that requires the recipient’s signature upon delivery. Don’t ship orders until the customer’s identity and address have been confirmed and the payment has been received.

  • Know Your Technologies

Fraudsters can infiltrate your web store through your network if your technologies aren’t up-to-date, allowing them to steal your customer information or install malicious software. Make sure your firewalls, anti-virus and anti-malware all have the latest rules and that your browsers and programs have the latest patches installed.

In addition to these guidelines, you should also maintain a good customer service presence. Often complaints from customers can make you aware of phishing sites or glitches in your system which could indicate malware or vulnerabilities much sooner than you might otherwise discover them.

How DalPay Helps to Prevent Online Fraud

At DalPay, we’re committed to online security. DalPay merchants are provided with all the tools they need to protect themselves and their customers from stolen cards and cyber shoplifters. We practice a strict Know-Your-Customer policy and always confirm your customer’s billing address through an Address Verification System (AVS) before shipping. If you have any suspicions about a specific order, we’re happy to perform a secondary screening at your request for no additional cost.

Finally, remember that we’re here for you. If you have any questions about the security of your business or your customers, please feel free to reach out to a member of our team.

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