Bumper Christmas – Are Businesses Spotting Fraud Risk?

A bumper Christmas for retail spending – but are businesses failing to spot the fraud risk?

With £8.2bn estimated to have been spent by UK consumers over the Black Friday/Cyber Monday weekend, and total consumer spending for Q4 expected to top £98.8bn once Christmas shopping has finished, there are signs that while the way we shop has changed in the digital age, the appetite for spending has not.

Two trends are stark. Firstly, the vast majority of consumer spending is by card. It’s been a while since cash has been king in the Christmas shopping stakes. Secondly, retailers are increasingly seeing consumers using their mobile phones to make purchases.

This creates a perfect storm for fraudsters.

With higher volumes of payments being made, consumers and businesses can become easy pickings for determined criminals. The unusual number of transactions on consumers’ accounts at this time of year, can make it more difficult to quickly identify if they have been a victim.

Allowing customers to pay by credit or debit card over the phone remains, for many businesses, a convenient method of taking payments, ensuring a sale is not lost by having to divert a customer to an alternative payment solution, and impact customer experience. It’s also a good way for businesses to ensure that a transaction is completed. After all, if you have a customer on the phone and they want to make a purchase there and then, your business would be taking a risk of losing that sale if you asked the customer to log on to a website, or even divert the call to the contact centre IVR system to complete the payment.

In fact, payment over the phone is the preferred method of payment in the hospitality, leisure and travel sectors. Booking that surprise New Year’s city break? Reading out card details to an operator makes it as easy as one, two, three!

So ask yourself the question, how many times has your business taken card details over the phone this year?

The answer, for most, will be many, many times – and each time poses the risk of a potentially crippling and damaging fraud attack if the right payment security technology is not in place.

Card fraud from telephone payments, in particular card-not-present (CNP) theft, has risen by almost 10 per cent in the past two years and is now seen as a “weak link” by fraudsters.

Official figures show that CNP fraud was valued at £432m in 2016, up eight per cent on the previous year, and is expected to rise to an estimated £680m by 2021.

So what is driving this rise in card fraud? The vast majority of CNP fraud involves the use of card details that have been fraudulently obtained through methods, such as unsolicited emails or telephone calls, or digital attacks such as hacking.

The card details are then used to undertake fraudulent purchases over the phone – a few minutes of time for a fraudster, and a potentially costly fall-out for a business.

The impact is not only financial. Your customers losing confidence in the security of interacting with your business is potentially more damaging in the long-run. You only have to look at the number of recent data breaches that have affected some of the world’s largest brands to see the kind of deleterious effect an incident can have on a brand’s reputation.

So, while the profit margins begin to recover at this time of year as spending soars, ask yourself the question of whether your business could be doing things differently to protect its brand and customers by and investing in a bullet-proof secure payment system?

The revenue may be rolling in, but at what cost and at what potential reputational risk to your company if the right technology is not in place to secure your customers’ telephone payments? The technology is available, and is simple to integrate without significant investment in infrastructure.

It is for all these reasons that Ultracomms has recently produced a White Paper giving businesses free practical advice on steps they can take to fully secure telephone payments and prevent card fraud.

Our top five tips would be:

1. Use and regularly update anti-virus software on your business’ IT infrastructure.
2. Embrace technology by ensuring that card data never enters your business in the first place. Our cloud-based solution PaySure has transformed the industry and means customers can securely enter their card details directly through their telephone keypad.
3. Regularly test your business’ security systems and processes.
4. Assign a unique ID to each person with computer access.
5. Maintain and regularly update policies that address information security for all personnel. Promote a culture of fraud awareness among employees and ensure a consistent programme of training.

So, the message is clear, put the right technology in place now and ensure your business and your customers are protected well before the 2019 festive spending begins It will protect both your brand and bottom line.