The Internet Age and Fraud: Knowing Who Your Customers Truly Are is Essential to Protecting Your Business

Running a business in the Internet Age can be both exciting and daunting. On one hand, you have access to new markets and can better reach potential but on the other, cybercrime is rife and you can be at risk for fraud. That’s why you need to know your customers. Knowing those who do business with you is not just important for marketing efforts; it can save your business lots of money.

It is necessary to securely establish proof that your customers are real. The United Kingdom’s National Fraud and Cyber Crime Reporting Centre warns about fraudsters who pose as customers.

“Fraudsters posing as customers can use a number of methods to deceive you –  the use of forged currency or someone else’s payment card details to pay for goods, or attempt to build a trusting relationship with you before placing an order or requesting a line of credit that they have no intention of honouring,” the Centre states.

Fraud is costly

Any of these actions can hit you in your pocket and if you’re a small business, fraud can even force you to end operations. You may permanently lose goods or money or you may have to pay significant legal and other costs to recoup that which was lost. There are several things you can do to help you establish the identity of your customers.

As a first step, be sure to ask for some legitimate form of identification and proof of address to see if they match other details you have been given. You should also make use of tools like Verified by Visa and MasterCard SecureCode which help to verify the authenticity of transactions. Checking credit histories and any publicly available records can also go a long way. If you have significant doubts, trust your instincts not to do business with a suspicious customer.

Things to look for 

There are some actions that should raise red flags. They don’t always mean that the customer is up to no good but they indicate that you should take a close look at the transaction. For example, a new customer with a particularly large order or a customer ordering multiple quantities of the same high value item. Deliveries destined for bogus addresses or PO boxes should also be of concern. You should also check that the debit or credit card belongs to person purchasing the items.

Staff training key 

It should be noted that the business owner should not be the only one on the lookout for signs of potential cybercrime. The Small Business Administration strongly suggests educating your staff about fraud, noting that employees can be both your biggest point of vulnerability and your first line of defense.

They need to be trained regularly in spotting cybercrime and policies should be put in place to guide them in handling both company and customer information.

While there is no way to guarantee that your business will never be the victim of fraud, there are several things you can do to reduce the likelihood. Once you and your staff get trained on the signs to look for, it is key to make sure you know as much as possible about your customers. This will go a long in protecting your business and its finances.


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My name is Gary, a 31 year old Tech Loving marketer passionate about home tech and coffee.

I'm a Programmer for hire working with small to medium businesses.

I network in Warrington, Liverpool and Manchester in the North West, England.

This website is my online notebook dedicated to tech, marketing and finance.

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