SMEs are most vulnerable to fraud when taking online payments, the Forum of Private Business (FPB) has warned this week.
If credit card information has been stolen and used to place an order, the merchant may have to refund expenses as well as paying a chargeback fee if the legal cardholder refuses to pay.
Small businesses are also susceptible to suffer when potential fraudulent activity occurs but is not proven.
Online banking fraud on the whole has fallen in the UK by approximately 33% when comparing the first 6 months of 2011 to the same period in 2010. £24.9 million was lost in the period in 2010, compared to £16.9 million for this year. Debit and credit card fraud has also fallen to its lowest level for 11 years as a consequence of chip and pin technology being implemented, but attempts to hack in to customer accounts, steal identities and forge payments are on the increase.
The Forum’s partner and adviser on merchant services, Richard Bradley, warned, "Card fraudsters are like a virus in that they change and adapt to the conditions they face and it is important to be vigilant in order to minimise the risks of being hit".
The FPB advised that SMEs should ‘be prepared’ and stay vigilant. It also issued a checklist of questions to be asked to assess whether mail order fraud is occurring, see their website here for how you can protect your SME.
There have been five quarters of continued growth in amount of advances issued through invoice finance facilities such as invoice factoring and invoice discounting.