International Fraud Awareness Week: Five Fraud Myths and Facts
It is International Fraud Awareness Week, and that makes it a good time to look at some of the myths surrounding fraud.
Fraud can target anyone, and it takes many forms including tax fraud, identity theft and credit card fraud.
It may seem that fraud couldn't happen to your business, but organizations actually lose an estimated 5 percent of their annual revenues to fraud. What's more, Shred-it research shows that over 30% of consumers have been a victim of fraud or identity theft.
Here are 5 common fraud myths you should know - and the facts.
MYTH #1: If you’re careful with personal information, you won’t be a victim of fraud.
Not entirely true.
FACT: Identity thieves are constantly evolving new and sophisticated ways to steal personally identifiable information (PII) and commit fraud. This includes malware and viruses, cyber attacks on companies that hold PII, phishing schemes, and common theft. In 2018, online shopping became the greatest fraud opportunity, according to Javelin research.
MYTH #2: The best way to fight fraud is to keep software and security apps updated on all your devices.
FACT: Device security is critical, but people need to safeguard themselves too. Fraudsters prey on emotions with ‘urgent’ phishing scams designed to trick victims into giving up information or money. Offline, fraudsters steal physical ID's, use skimming equipment at ATMs, shoulder surf, and dumpster dive.
MYTH #3: You can depend on businesses and organizations to protect your confidential data.
FACT: While there are data protection and fraud prevention policies including anti-fraud training and corporate fraud prevention in most sectors, full compliance is questionable. In fact, our research found that data breaches experienced by North American businesses continue to grow. Only 64% of C-Suites and 43% of small business owners in the research say employees even understand data storage and disposal policies.
Myth #4: Fraudsters use stolen account credentials only once or twice.
FACT: When fraudsters get access to a victim's bank or credit card accounts (known as account takeover fraud), Siftscience.com research showed they will likely keep using them until they’re caught. Furthermore, once fraudsters get access to one account, they use it to gain access to others. The incidence of this type of fraud has tripled, according to Javelin.
MYTH #5: When it comes to detecting fraud, whistle-blowing has a bad rap.
FACT: Tips are actually the most common method to detect fraud, according to the Association of Certified Fraud Examiners. An effective workplace supports a culture of security, and provides an anonymous Fraud Hotline as well as ongoing education to detect fraud. Organizations with hotlines detected fraud 50% faster than those without.
Here is a quick checklist of fraud prevention strategies:
- Share personal information only with companies and people you know and trust.
- When sharing data, ask organizations how information will be protected.
- Keep track of your financial accounts.
- Protect all confidential information on paper and data while travelling, in public places, and in the workplace. Lock it away, or keep it hidden in hard-to-reach places.
- Take advantage of workplace training to understand fraud risks and avoidance strategies.
- Shield keypads when entering pin numbers and password in public.
- Always use strong passwords.
- Always securely shred confidential documents on paper or hard drives when no longer needed.
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