Identity theft and card fraud are growing rapidly and costing consumers and issuers billions of dollars annually. Fraud can result from having your credit card stolen, identity theft, card skimming, counterfeit cards and online frauds such as phishing and pharming. According to the FTC nearly 10 million people a year fall victims to identity theft - add those affected by card fraud and 1 in 20 Americans suffer from identity theft or card fraud every year.
To protect yourself in this environment you need a good dose of street smarts as well as knowledge of what the guidelines and regulations protecting the consumer are. merchants, banks and other institutions have a large role in protecting data and preventing identity theft and card fraud. with the crooks continuously updating their bags of tricks, everyone must be on top of their game.
What is Fraud Costing Your Small Business?
The typical organization loses five percent of its annual revenue to fraud, according to the Association of Certified Fraud Examiners in ACFE's Report to the Nations on Occupational Fraud & Abuse. If you are a merchant, key findings of the report can open your eyes to ways to prevent, deter and detect fraud before your business suffers the consequences.
Fraud perpetrators often display warning signs that they are engaging in illicit activity. The most common behavioral red flags displayed by the perpetrators in the study were living beyond their means (43 percent of cases) and experiencing financial difficulties (36 percent of cases). Did you know that occupational frauds are much more likely to be detected by tip than by any other means? If you are suspicious of a card or cardholder at any time during a transaction authorization process, you will need to make what is called a Code 10 authorization request.
The Code 10 authorization request alerts the card issuer to the suspicious activity - without alerting the customer. During a Code 10 call, you will speak to the card issuer's special operator, who will provide instructions on any necessary action. This type of authorization request is the most likely to result in a call to law enforcement. If you can avert a fraudulent transaction, you will reduce your risk of chargeback activity.
Merchants are not the only ones concerned about credit card fraud - consumers also have this ongoing concern. In order to reassure your customers about your safe practices when handling their credit card data you can find ways to remind them about your fraud prevention efforts. Every major credit card network and reputable credit card processing provider offers fraud-prevention measures as part of the necessary merchant education for safe credit card processing. You need to practice secure operations in how you collect and store card information. Merchants should only produce receipts with partial card data (most often the last four digits of the credit card number are used) and special codes that hide card data.
Your records and credit card receipts must be maintained in a secure computer database and any physical receipts must be kept far from the public contact and destroyed in compliance with the Payment Card Industry Data Security Standards (PCI DSS). Computers must be password protected and all employees need to be thoroughly trained in safe policies and procedures. The standards apply to all organizations that store, process or transmit cardholder data. The PCI SSC is responsible for the development of the standards, and the founding payment brands enforce PCI compliance.
The PCI DSS were developed to help acquirers, merchants and service providers achieve compliance with a vital standard, that gives customers assurance and peace of mind that their transactions are protected and merchants the tools they need to identify vulnerabilities in security processes, procedures and website configurations that could lead to a security breach and put their small business at great risk.
Starting a social media campaign can help your small business keep your customers aware of all of the features that you have implemented for secure data and fraud prevention. Regular postings on your company website along with emails, texts and tweets can offer fraud-prevention tactics and privacy tips.
A thriving business is one that makes security a top priority. With secure credit card processing you can protect your business, your customers and build stronger customer loyalty for years to come.