Fraud rates may be declining, but businesses are reminded by Australia’s largest bank, Commonwealth Bank, to remain extra vigilant during the holiday season.
According to CBA, the level of fraud committed against the bank’s merchant customers has fallen by more than 15 per cent to 47.3 cents per $1,000 in 2020. Industry data shows that nation-wide, fraud has fallen to $447.2 million for the 2019-20 financial year.
That’s despite a surge in online shopping, which was caused due to Covid-19 lockdown restrictions, the bank revealed.
But while the data is positive, CBA general manager of merchant solutions, Sam Itzcovitz, said businesses shouldn’t get complacent.
“It’s promising to see fraud rates decline, but we know all businesses are still susceptible to fraud in this increasingly online world,” he said.
“It’s going to be a busy shopping season for many of our small business customers, and possibly a bit of a learning curve for those who accelerated their transition to online payments this past year.”
Itzcovitz said fraud protection was “essential” to running a business, particularly when it comes to ‘card not present’ transactions, which are primarily online or over-the-phone.
“These sorts of scams against merchants can be hard to spot, so it’s important merchants take the time to understand how they could potentially be defrauded, and what they should do to reduce that risk,” Itzcovitz said.
How can businesses protect themselves against fraud?
There are four ways businesses can protect themselves against fraud as we get into the festive period:
Educate staff about fraud;
Understand the risks of different types of transactions;
Learn how to spot refund fraud;
Remain vigilant with in-store transactions.
While businesses need to be wary of fraudulent customers, customers need to also be on the lookout for online scams and cyber crime.
Finder.com.au data revealed online shopping fraud has more than doubled in the past 12 months, with Aussies losing around $666,000, or around $499 each, to online scams in October online.
“Festive fraud is likely to be the highest on record in 2020 as criminals ruthlessly adjust their approach to pursue those consumers shopping online,” Finder.com.au personal finance expert Kate Browne said.
“With Christmas fast approaching, cyber criminals will be stepping up their efforts by impersonating genuine sellers and businesses.”
Customers are reminded to research sellers, update their passwords and contact their bank immediately if they think they’ve been scammed.
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