Mar 28, 2013 Walt Wojciechowski
Fraud prevention is one of the most important duties for merchants today. Those who neglect to take the potential for information theft seriously may find themselves in difficult positions as they jeopardize the quality of patrons' consumer credit reports by leaving their databases open to attack and, in turn, lose their on reputation and revenue in the aftermath. While this identity fraud is not a new issue, it seems that many companies have failed to recognize the importance of thwarting fraud online as well as in-store.
According to The Paypers, a recent study conducted by Info-Tech Research Group for ThreatMetrix found that 40 percent of United States retailers did not have any online fraud prevention solutions in place during 2012, even though nearly all (85 percent) claimed stopping these crimes was among their top priorities.
ThreatMetrix noted that in 2012, some of the most common dangers for vendors were malware, Trojans and phishing attacks. Likely due to the lack of adequate protection, 46 percent of the businesses polled experienced at least one malware-related fraud incident during the year, and a similar number (45 percent) found themselves at the mercy of a Trojan.
Perhaps most worrying, half only spent around five hours each month developing knowledge of the latest online threats. Without a basic understanding of various risks and how they may effects customers and the company alike, it may be difficult for business owners to deploy adequate solutions.
Fraud prevention is merchant protection
Other researchers have also sounded the alarm concerning merchants' tendency toward inadequate fraud prevention. Javelin recently released several separate reports on the matter, with the 2013 Banking Identity Safety Scorecard noting that the cost of identity fraud rose about 50 percent in 2012 over 2011.
Additionally, Javelin's 2013 Identity Fraud Report spelled out the costs to companies of paying too little attention to safeguarding their customers' consumer credit reports. After an identity theft incident, shoppers tend to change the way they make purchases and 15 percent are likely to avoid small businesses, in favor of purchasing from larger chains, going forward.
By neglecting to protect customers, merchants put their livelihoods at unnecessary risk. While it may amount to extra upfront expenses, deploying fraud prevention solutions can save money in the long run by avoiding costly data loss incidents. After all, one of the most important assets business owners have is their patrons' trust.