How to avoid scams and fraud: Best practices for your business Businesses lose money every year due to fraud. But with the correct practices in mind, you can catch fraudsters before they even have a chance to exploit you, saving you time and money. This article will walk you through ways to avoid scams and fraud. This includes several types of fraud, like account takeover fraud, credit card fraud, synthetic identity fraud, bonus abuse, and friendly fraud.To get more news about fraudulent company, you can visit wikifx.com official website. What is fraud, and which businesses does it affect? Fraud is when an actor deceives another person or company by presenting misleading information or pretending to be someone they’re not for their criminal financial gain. Fraud is illegal. However, some fraudsters are clever enough to go undetected. Fraud can affect businesses of any size and type. The median loss of businesses to fraud is a considerable $120,000, according to GrowthForce. That’s because by the time you realize that your business has been impacted by fraud, it’s too late – you’ve already lost money. While financial losses might be at the top of your concerns, fraud can damage your reputation as a business. This makes the fact that a 2022 PwC survey found that just over half of businesses had platform fraud – the highest level in their research. Therefore, knowing how to avoid scams and fraud is more important than ever. Below, we’ll explore how to avoid scams and fraud. Many fraud detection and prevention tools help tackle several types of fraud at once, so you can tailor your approach to your business needs. Account Takeover fraud With the rise of online shopping and e-wallet, fraudsters have found new ways of taking advantage of this. E-Commerce sites, financial institutions, and iGaming operators are common targets of certain types of fraud like digital wallet account takeover fraud. That’s because these companies often use e-wallets so customers can access their funds more efficiently. Criminals gain access to a victim’s e-wallet by taking over their account, this can be done in various ways, from leveraging compromised login data to social engineering their way in. They might find this information when leaked password data from a data breach is sold on the dark web. Credit card fraud As SEON says in their guide to credit card fraud, account takeovers can lead to criminals gaining access to a customer’s credit card details – they can extract them and use them to commit payment fraud. This problem worsens if the account is an e-wallet, which means they can draw funds from them directly. Fraudsters can also steal a customer’s credit card details through other means, such as physically stealing a customer’s card. This includes skimming, where criminals successfully capture information from a victim’s card using a skimming machine attached to a card reader. Below, we’ll explore a few ways that you can prevent account takeover fraud from affecting your business. You’ll be able to spot a criminal and blacklist them before they can make a transaction or even log into a victim’s account. Device Fingerprinting Businesses must protect themselves against account takeovers or credit card fraud as much as possible. One way is detecting suspicious logins and behaviour via fraud detection and prevention software. You might be able to blacklist a login attempt through device fingerprinting and IP analysis alone. What’s device fingerprinting? By assigning each user a unique hash, you can detect whether someone’s trying to access your website via emulators, virtual machines, or VPNs (which can be used to hide a user’s IP address). Behavioural analysis with velocity rules Behavioural analysis is another way to catch a criminal just by their suspicious actions on your site. Fraud detection software that incorporates behaviour analysis (with velocity rules) will be able to spot when a customer is requesting a large number of password resets (so that they can try to access a victim’s account) or have tried to log into an account hundreds of times. For suspicious users, you can add additional friction during the Know Your Customer (KYC) stage. While adding this type of friction is usually too much for most customers (it can ruin their customer journey experience), it’s required to know whether a user is a person they’re claiming to be. KYC can include asking a customer for video verification, a selfie, or 2 Factor Authentication. This is known as hard KYC, as it creates a lot of friction for the customer in their journey.