4 Steps for Preventing Consumer Fraud

4 Steps for Preventing Consumer Fraud
April 25, 2019 Meghan Belnap
In Business, Post, Technology

New and old businesses are faced with new threats as more and more of their consumer interactions are taking place online. With promotions for account creation, first-time purchases, and other specialized deals, computer hacks are getting craftier at taking advantage of these deals to the detriment of the company. Here are a few ways that companies can protect themselves from fraudulent consumer practices, allowing them to continue to offer great deals to legitimate customers.

Use a Secure Method of Payment for Transactions

Whether a person runs an online web store or has a physical location where customers can purchase goods directly, a secure form of payment is a basic requirement. Card readers and numbers can be hacked or stolen. In addition, any payment information a customer sends to a business over the web is at risk if the business hasn’t secured its web portal. Safe payment methods make it much harder to steal data and encrypt it to make it unreadable. If your business isn’t willing to invest in their own software protections, then using third-party, secure transaction methods like Paypal are the least you can do to meet your company’s responsibility to protect your legitimate customers.

Verify Potential Customers

People aren’t always who they say they are when it comes to doing business online. It is easy for others to misrepresent themselves in an effort to get something out of it. Setting up multiple accounts with different emails, different cards, and others are easy ways that many consumers trick companies into qualifying them for lucrative deals. In order to prevent fraud, many business owners use entity extraction software. Entity extraction is an analytical text tool that can help businesses identify duplicate accounts made by the same customer and identify consumers previously involved in fraudulent activity against the company.

Use Strict Return or Refund Policies

Perhaps one of the simplest methods crooks use to take advantage of businesses is the exploitation of any return policies they might offer. Many people get what use they can out of the goods and then try to return them for a refund. In some cases, they might ask for refunds without verifying there is an actual problem with the goods they were sold. This might allow them to keep both the goods and their money. Setting strict guidelines related to returns or refunds, including requiring the return of the product or picture verification can save companies a great deal of money in fraudulent returns.

Maintain High Standards of Security

Web security is a complex field that works as a shield over all of the data and activity of your company. An unsecured online portal might allow a skilled hacker to infiltrate a system to steal customer data and use it to defraud the same business or multiple others later. One of the easiest ways to mitigate this is by registering a secure domain. No company website that handles private customer information and accounts should operate with less than an HTTPS domain, otherwise the company and the consumers are at risk.

Unscrupulous people try to use clever schemes to defraud others on a regular basis. Unfortunately, many people can lose millions annually because they don’t know how to protect their company and customers online. Some of the tips we’ve provided above are just a few of the ways business owners or company executives might take steps to secure their business against consumer fraud.

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