In the past, business fraud
mainly involved internal issues caused by a company's dishonest employees and
executives. Today, corporate fraud still involves the same problems, but
ecommerce fraud has rapidly grown over the past few years to become one of today's
biggest issues for many businesses worldwide. To learn how to avoid these two
basic types of corporate fraud, you must understand how these fraudulent
schemes are done this year.
- Internal Business Fraud This 2016
Fraudulent tactics of
dishonest employees and executives for committing internal business fraud have
evolved throughout the years. This is to keep at pace with the rapidly growing
popularity of advanced technologies for the back end systems of many businesses
around the world.
Payroll fraud is one of
those back end business systems that can be exploited by internal accounting
and management staff. With new technologies for supposedly quicker and simpler
employee time-keeping and work-tracking systems, downtimes can be simulated to
cause certain delays in what should be regular reconciliation processes with
the company's accounting operations. This business fraud aims to steal money
from a company through payments for non-existent overtime hours.
Over-stocking schemes and
double check fraud have also become quicker and easier for dishonest employees
to manipulate with the latest banking technologies out there. The acquisition
of a company's required supplies is now done through semi-automated processes,
which can be exploited by internal staff through quicker and easier ways for
returning excessive supplies in exchange for cash and gift cards. The latest
business checking account platforms are also being exploited through identity
fraud, which makes it simpler for internal staff that issues checks to defraud
a business.
Now that you know how internal business fraud is integrated with the latest back end technologies of
many companies today, let's move on to the more recent types of ecommerce
fraud. These are some of the most widespread tactics that are used by criminal
syndicates worldwide to defraud businesses of all sizes around the world this
2016:
- Ecommerce Fraud This Year
Leading the lineup when it
comes to the most prevalent tactics and schemes for committing online business
fraud this 2016 is card not present scams. This is where fraudsters use stolen
credit cards and sometimes even hacked bank accounts to order products from an
ecommerce store and have it delivered to other criminals with safety drop-off
points. When legitimate account owners file disputes and chargebacks against
these fraudulent transactions, the ecommerce merchant is left to pay fees
despite losing their products without any revenue.
Many businesses even lose
the ability to accept online payments. Some of them are sent to merchant
blacklists because of these scams. Some online security groups in the USA
reported $8 billion of losses because of these card not present scams in 2014,
and they predict around $19 billion of losses due to credit card fraud among
other types of identity theft by 2018.
Friendly fraud is also a big
problem of many businesses that sell digital goods and virtual services. This
is where customers intentionally file disputes and chargebacks to defraud
businesses. They keep the products of merchants for themselves and stiff
virtual service providers out of their hard work. This online business fraud
has caused businesses around the world millions of dollars in losses.
Now that you know the most
prevalent types of online business fraud this year, you can choose the most
suitable set of Web security technologies and manual customer identity
verification procedures to implement into your ecommerce operations. Just
remember to also keep in mind the most widespread internal fraudulent schemes
that affect many businesses today. This will provide you with a means to
combine the available solutions today to fight both internal corporate and
ecommerce fraud.
