March is Fraud Prevention Month in Canada. Spearheaded by the Competition Bureau, 2016 marks the 12th anniversary of the federal government’s education and awareness campaign that encourages everyone to recognize, reject, and report fraud.
According to an Equifax survey, more than half of Canadians have fallen victim to identity theft or financial fraud. In fact, fraud is now a multi-million dollar business in Canada, whereas mass marketing fraud losses to businesses and citizens has grown to over $10 billion annually.
John Pecman, the Competition Bureau’s Commissioner, emphasized the importance of collaboration from the public as well as industry in preventing fraud:
“The tactics employed by modern scam artists require law enforcement and consumer protection agencies to rely more than ever on the public to report fraud. We will continue to work to ensure that consumers and businesses can recognize and reject fraud, in order to thrive in a competitive and innovative marketplace.”
In 2015, authorities across the country received over 18,000 extortion-related complaints, which resulted in costing more than 1,000 people over $3 million.
A few trends from the Canadian Anti-Fraud Centre Annual Statistical Report 2014 for Mass Marketing Fraud & ID Theft Activities:
- Canadian victims of an email/Internet solicitation have the highest total reported dollar loss.
- Money Service Businesses (MSBs) is the top reported payment method used to send funds from Canadian victims.
- Canadians between the ages of 60-69 are the most targeted by mass marketing fraud, and victims between 50-59 reported the highest dollar loss.
Trulioo, a Vancouver company that specializes in verifying identities online, was recently recognized for its innovation in cyber security and fraud prevention. Applying Know Your Customer (KYC) processes is the first step to fraud prevention.
“Preventing fraud is everyone’s concern, from consumers and businesses to financial institutions and regulators,” said Zac Cohen, General Manager at Trulioo. “The fact that almost $118 billion of legitimate online orders are incorrectly rejected each year demonstrates yet another by-product of fraudulent activity, and why it’s crucial to leverage technology that strikes the right balance between usability and security.
What else can businesses do to protect itself from fraud? Here are six tips from Trulioo.
1. Know Your Foe.
To be the most effective, first get familiar with the different ways that online fraud can occur. Some common methods are identity fraud, credit/debit card fraud, phishing email, and malicious software that steals customer data.
2. Have a Plan.
Businesses need to have a comprehensive cybersecurity plan in place that not only prevents fraud or data breaches but also deals with how to handle a security incident if it occurs. The plan should cover areas such as best practices for employees using email and social media, as well as safe web browsing principles.
3. Educate Your Employees.
A company’s employees are the first line of defense against any online attack. Train staff on how to recognize, reject, and report fraud. Also ensure that each employee is familiar with how to properly handle confidential information.
4. Filter Out the Wolves from the Sheep.
By verifying identities before a transaction is made, businesses and organizations can keep out the bad guys while letting the good guys in. Implementing KYC procedures will help onboard legitimate customers and flag high-risk customers who require enhanced due diligence.
5. Build Up Your Defenses.
Online fraud can come from many different sources using different methods. Therefore, it makes sense that the most effective way for businesses to defend themselves is to set up a multi-layered defense system leveraging multiple tools. These tools can include online identity verification, fraud detection software, and biometric data.
6. Learn From the Past.
History can be a great teacher. It pays for businesses to learn from past mistakes, not only their own but also those of others. Find out where the potential security gaps may lie and make sure that they are dealt with quickly.
“Unfortunately, there is no shortage of recent online fraud incidents to study,” said Cohen. “By closing loopholes and having a multi-faceted approach to security, companies can better protect against future attacks.”
For a list of events taking place during Fraud Prevention Month, check out the Competition Bureau calendar.