The expected surge in fraud as recession deepens is a threat to retailers but also offers opportunities, says Tom Ilube
Personal data is the lifeblood of cyber crime. With retailers holding a lot of data on customers, businesses need to be aware of the risks of storing personal information and how they and their shoppers can be protected.
Research suggests cyber crime is one of the fastest-growing areas of criminal activity, with financial fraud up by 20% in the past year.
Shockingly, in order to steal an identity or commit financial fraud, online fraudsters need just three key pieces of information. The basic data customers provide when shopping online or acquiring store cards, used in conjunction with other information that is easily accessible on the internet, can expose a customer to fraud. It is because such data is so valuable to criminals that UK retailers face stiff sanctions if they fail to comply with the Data Protection Act in safeguarding consumer information.
The act provides a framework to ensure personal data is handled properly by companies. It states that organisations possessing an individual's information must ensure the data is secure, accurate, processed for limited purposes and not kept for longer than is necessary.
As well as being legally liable, business reputations are also at stake. It is vital retailers put measures in place to ensure data is secure. Passive monitoring is not enough. Businesses should proactively ensure information is not making its way into the black market.
If predictions that the recession will prompt a surge in fraud are correct, businesses will be under even more pressure to protect their customers. But the situation also presents an opportunity.
By establishing a reputation as an organisation that is serious about data protection, retailers can seize the initiative. They can steal a march on their rivals by offering customers comprehensive policies to ensure their information is kept safe from online fraudsters.
Only action by retailers, combined with increased care from consumers over where they make their data available, will help cut cyber criminals off from the personal information they need to thrive.n
Tom Ilube is CEO of online identity experts Garlik.
Personal data is the lifeblood of cyber crime. With retailers holding a lot of data on customers, businesses need to be aware of the risks of storing personal information and how they and their shoppers can be protected.
Research suggests cyber crime is one of the fastest-growing areas of criminal activity, with financial fraud up by 20% in the past year.
Shockingly, in order to steal an identity or commit financial fraud, online fraudsters need just three key pieces of information. The basic data customers provide when shopping online or acquiring store cards, used in conjunction with other information that is easily accessible on the internet, can expose a customer to fraud. It is because such data is so valuable to criminals that UK retailers face stiff sanctions if they fail to comply with the Data Protection Act in safeguarding consumer information.
The act provides a framework to ensure personal data is handled properly by companies. It states that organisations possessing an individual's information must ensure the data is secure, accurate, processed for limited purposes and not kept for longer than is necessary.
As well as being legally liable, business reputations are also at stake. It is vital retailers put measures in place to ensure data is secure. Passive monitoring is not enough. Businesses should proactively ensure information is not making its way into the black market.
If predictions that the recession will prompt a surge in fraud are correct, businesses will be under even more pressure to protect their customers. But the situation also presents an opportunity.
By establishing a reputation as an organisation that is serious about data protection, retailers can seize the initiative. They can steal a march on their rivals by offering customers comprehensive policies to ensure their information is kept safe from online fraudsters.
Only action by retailers, combined with increased care from consumers over where they make their data available, will help cut cyber criminals off from the personal information they need to thrive.n
Tom Ilube is CEO of online identity experts Garlik.
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