5 Ways to Avoid Digital Fraud
Becoming familiar with digital fraud can help you protect your personal data and money, especially in a world that is rapidly moving towards the digitalization of payments. The enormous increase in ecommerce and m-commerce transactions creates a variety of opportunities for fraudulent activity. When we talk about online fraud, we mean deliberate deception, intended for personal or financial gain. This blog provides examples of digital fraud and ways to decrease those risks.
Fraud happens through a variety of different means of interaction such as email, instant messaging, rerouting traffic to fraudulent websites, phone calls, and many more. This way, cyber thieves manage to access consumers’ money, personal property and sensitive data.
Have you seen our video on cybersecurity and fraud in the financial services industry?
What are some examples of digital fraud?
- Identity theft – obtaining personally identifiable information to make purchases online
- Friendly theft – making a purchase with your own credit card and then contacting the credit card issuer asking for a return of the charge based on claims that the item was not delivered
- Triangulation theft – when the customer purchases something from a fake online store, the fake merchant steals the credit card details
- Clean fraud – hackers use real customer data to fool the systems to make the fraud look like a real purchase
- Merchant fraud – usually happens with low priced goods that after being ordered are never shipped and the payments are kept
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How can you decrease the chance of fraud?
- SSL Protocol is an encryption method that adds digits to the data shared online in order to make it unreadable for unintended parties (for example: Adding your credit card details when making a transaction online).
- PCI Compliance is a security standard that provides a safer environment for both consumers and businesses. This is the only regulated means to protect your business from non-cash payment fraud.
- Tokenization is a technology that replaces sensitive information with tokens (strings of characters). It significantly reduces the chances of data breach, as a stolen token is useless to the unintended parties.
- 3D Secure prevents fraud in terms of transactions with credit and debit card. Created by Visa and MasterCard, this security protocol represents a 3D security page where customers need to identify themselves by entering the password or a one-time PIN
- Address Verification Service – the customer needs to provide their billing address in association with the credit card that is being used, if it does not match, the transaction does not go through
If you are a business, being up to date with the latest fraud trends is essential. Encryption of transactions and emails containing confidential information is another important step. Using antivirus software to regularly run security checks is also vital for the safety of the company and its customers. Establishing a clear and deliberate policy when it comes to the handling confidential information is also a necessary step for any party handling sensitive data in the modern age.
You might also want to read our blog on A Cashless Society: Elusive Dream or Inevitable Future.
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