The risk of fraud with online services

Online fraud efforts will continue to increase as more and more individuals regularly use networks to access Facebook, Twitter, Internet banking and online payment systems. 

Organisations with online services tend to face the same risks but with potentially bigger consequences. 

When an organisation requires customers to register personal details along with their banking or credit card information, the company is exposing themselves and their clients to potential online fraudulent activities (Yarden, 2005). 

These online risks include identity theft, credit card fraud, ransomware and online scams (Gordon & Ford, 2006, p. 15 - 16). Overall, these online risks can damage the reputation of an organisation and cost them the loyalty of their customers.

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An organisation’s reputation can be damaged by just one fraudulent activity that exposes the customer. This happened to me at first hand. A few years back, I was a regularly customer of the online shop ‘Amazon’. The website seemed perfectly safe and secure for me to use my credit card details to purchase items that were always delivered on time with no problems. 

Unfortunately one time, I became a victim of credit card fraud where my details were stolen and used to purchase airplane tickets from another country. It was then that I realised a hacker had stolen my details during one of my purchases on ‘Amazon’. Since then, I have never bought anything from ‘Amazon’ again, which shows how the incident had destroyed the company’s reputation and cost them a customer (me!).

Therefore, it is recommended that for organisations to minimise the risk of fraud for online services, the company implement policies and programs that will improve the level of security for both the business and its clients. The policies should prevent and detect the potential risks of using the organisation’s online services through the use of IP and email address controls, multi-factor online authentication where the user has to approve transactions by two or more forms (ie. login details and SMS confirmation code) and perform account level checks to look out for ‘out of the ordinary’ transactions (McGlasson, 2010).   

References:

Gordon, S, & Ford, R. (2006). On the definition and classification of cybercrime. Journal in computer virology, 2, 15 – 16. doi: 10.1007/s11416-006-0015-z.

McGlasson, L. (2010). 6 steps to reduce online fraud. Retrieved from http://www.bankinfosecurity.com/6-steps-to-reduce-online-fraud-a-2375/op-1

Yarden, J. (2005). Know the risks of using online payment systems in a corporate environment. Retrieved from http://www.techrepublic.com/article/know-the-risks-of-using-online-payment-systems-in-a-corporate-environment/