Six Ways to Protect Your Business from Christmas Scams

Richard M. December 21, 2020 9 minute read

01 Wrapping It Up

Christmas is around the corner and all of you must be very excited to decorate christmas trees, exchange gifts, and enjoy the remaining holiday season with your loved ones. Unfortunately, fraudsters are all set to fulfil their illegal gains during christmas holidays. Businesses in the digital space are at great risk of frauds this year, especially e-commerce platforms. With everyone locked in their homes due to the pandemic, cybercrimes have exponentially increased in 2020.

According to reports from the US FBI, there has been a 300 per cent increase in cybercrime due to the coronavirus pandemic.

Considering the rise in cybercrimes, businesses need robust solutions to combat christmas scams. Identity theft, gift card fraud, Business Email Compromise (BEC), spear attacks, account takeover, etc, are on the rise and your business must take preventive measures to combat frauds this christmas. Read this blog to find out some of the best ways to combat frauds during christmas.

What are the Ways to Protect Businesses from Frauds?

Securing your business from fraudulent activities is one of the most challenging tasks. However, there are some ways that can help you. Here are six ways to prevent frauds:

Know Your Customer (KYC)
Employee verification
Transaction monitoring
Know Your Business (KYB)
Biometric authentication
Employee training

Know Your Customer (KYC)

Know Your Customer (KYC) verification is essential for all businesses operating in the finance, online gaming, cryptocurrency, or e-commerce sector. As per the law, it is important to verify all customers during the onboarding process to ensure that only legitimate people are registered. This is one way to deal with criminals that are developing sophisticated techniques for their illegal gains. The KYC verification process verifies documents of the customers, detects for live presence of the customer, and also verifies address. During document verification you can authenticate if the customer is using forged documents for verification or not. In face verification checks, you check for presence of the real customer through liveness detection, 3D mapping, and skin texture analysis. Lastly, address verification checks help you avoid returned shipments.

Employee Verification

Over time, fraudsters have figured out ways to penetrate businesses as employees and execute their malicious plans. Businesses strive hard to get honest and hardworking individuals onboard, but in the modern world, it has become a challenge that is hard to tackle. Due to lack of robust mechanisms for verifying employees or job applicants, it gets easier for criminals to target companies. Your e-commerce platform or financial institute might have a fraudster disguised as an employee. During christmas, it will be easier for him to steal money or you might encounter friendly fraud this year. With the help of employee verification, you can authenticate all applicants and make sure people with suspicious backgrounds stay away from the business.

Monitor Transactions

Transaction monitoring is one of the finest ways to detect chargebacks and credit card fraud. How does transaction monitoring work? Also known as Know Your Transaction (KYT), transaction monitoring is performed to monitor and verify all the transactions are made by the legitimate owner of the account . In case any of your customers are using fake credit or debit cards for payments, you can easily identify the fraud on time. Financial institutions have been using it to prevent false transaction reversals and other financial crimes. You can employ transaction monitoring to avoid chargebacks, returned shipments, and friendly fraud.

Train Your Team for Fraud Detection

Fraud detection requires sound knowledge about the subject and if your employees aren’t trained, it will be harder for you to protect your business. Before you lose a fortune to cyber attacks this christmas, train your employees to combat them. Arrange training and development sessions so that your employees can identify whaling or spear phishing attacks rather than responding to them with confidential information.

Know Your Business Partners

Vendors and other business intermediaries are in full swing with online christmas sales going up. Have you ever wondered about the fraudsters disguised as legitimate suppliers? It is hard to identify criminals at this time of the year. It is easy to trick business owners into compelling deals for products at half prices. First, why would anyone supply products at half price during christmas? Second, you do not know the other business entity, so why will you trust anyone without verifying their background? Employ Know Your Business (KYB) verification checks to ensure all the intermediaries you get in touch with are legitimate. KYB is one of the ideal ways of dealing with fraudsters and preventing christmas scams.

Biometric Authentication

Apart from all other methods, you can use biometric authentication to prevent frauds. Facial spoof attacks have significantly increased over time. Fraudsters disguise communication from an unknown source as a known source. In a facial spoof attack, a fraudster attacks the face verification system disguised as a legitimate person. The main motive of spoofing attack is to acquire personal information of legitimate people and malware attacks. With the help of biometric authentication, businesses can identify facial spoofing attacks. Liveness detection ensures that the end-user is present during verification and 2D or 3D face masks are identified on time.

Wrapping It Up

Christmas is around the corner and the exhilarating festival brings lots of joy in life. Due to the pandemic, the majority of consumers have shifted to online shopping which makes the e-commerce industry a great target for fraudsters. Different reports have mentioned that criminal activities during the holiday season especially christmas will significantly increase. Ultimately, online businesses are at stake and there is a need for solutions that can prevent frauds. Know Your Customer (KYC), employee verification, Know Your Business (KYB), transaction monitoring, and employee training and development are some ways of achieving the goal. Apart from all these solutions, compliance with the regulations from FATF and other regulatory authorities is another great way of combating fraud.

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