Keep Your Company and Customers Safe from Bank Fraud

If you haven't gone digital with sales for your products or services, the time to do so is upon you. More people are browsing and making purchases online than ever before, and the trend is only going to increase. This also means it is more important than ever to keep your customers and your company safe from potential banking fraud.

Data breeches from credit card use online is a real threat to everyone. Target experienced this first-hand during the holiday season when their company had its credit card system hacked and thousands of customers had their card numbers stolen. According to Forbes, the fiasco cost both the CEO and CIO their jobs and is estimated to have cost the corporation around $18 billion.

In some cases of stolen credit card numbers, the information is sold in bulk to one underground group, then broken off into random smaller batches for resale or use. It seems like a process that should take weeks or even months, but it can happen in as little as 12 hours. That leaves the criminals with anywhere from 12 hours to 4 weeks before any suspicious activity is noticed.

What Can You Do to Protect Yourself and Your Customers?

A good place to start is by watching out for unusual orders that are not made in person. These typically can include:

• shipping to a different address than the bill to address.
• large orders with next day shipping.
• shipping to a foreign country.
• missing information such as phone numbers.

This is not an all-inclusive list, but it is a good indicator that something suspicious may be amiss. In most cases, banks have gotten much better at spotting this sort of activity as well, so they hold the charge and contact the card owner.

Another good option is to hire out a company that is verified and approved to test your current banking system. A verified company will administer what is called banking application testing in order to determine the security of the system in place, and where there may be potential risks. This will allow you to find a resolution to the issue before it becomes a major problem. By running the test, you can minimize your future risk and save thousands, possibly millions of dollars in losses.

It is also a good idea to require customer telephone numbers for all non-cash related purchases. This gives you the opportunity to verify anything that may be questionable with the customer, and then with the bank that issued the card in question. Some systems for electronic payment will also assign your company with a merchant ID, so you can call the bank to verify any questionable charges and get approval codes over the phone.

Pay for fraud security insurance. While it may seem like a silly cost at first, if your system is hacked and customer or company accounts are jeopardized, the cost will be justified and then some. Fraud security insurance could be the difference between your business going under due to losses and having a security cushion to catch you.

What Do You Do if There is Suspicious Activity?

Report anything that is clearly suspicious right away. If you deal with small ticket items and there is an order for $5,000 worth of merchandise, it is safest to try and verify. If there are a number of warning flags, contact the merchant for the card and notify them of the suspicious activity. They will guide you through the next steps from there. It is important to know how to deal with suspicious activity.

Any time you deal with electronic banking, make sure that you keep your company and yourself safe from hacking and fraud.