Is your online identity safe from theft?
Online retail has grown at a phenomenal rate over the last decade, and online fraud has not lagged behind. Nowadays enterprises and consumers need to be well informed of the many tactics that cybercriminals use to steal their hard earned cash.
Consumers generally think that online shopping is safer than high street shopping. After all, thieves can’t physically touch the merchandise nor can they dip their sticky fingers into consumers pockets. However, just because consumers are doing their shopping from the safety of their home, does not mean that they are in any less danger. In fact, there are even more threats awaiting consumers in this day and age.
Fraudsters are migrating their fraudulent activities online — a place where a only a few pieces of personal information is required and a physical credit card is no longer needed. Identity theft is becoming a pandemic, and it’s becoming a concern amongst consumers, merchants and law enforcement too.
Online enterprises are also at risk. When fraudsters get their hands on consumers’ sensitive data to make an online transaction, usually the victim is the eCommerce website where the purchase was made, as typically credit card providers will initiate a chargeback to the identity theft victim, leaving enterprises without the money nor the goods to cover the loss. And with fraudsters purchasing high-end products such as jewelry, electronics, and gift cards — the cost can be very high — about $25 billion per year in credit card refunds, which is only set to rise even further. The Nilson Report has reported that the loss will go up to $31 billions to chargeback by 2020. These numbers are startling! In 2016 alone, for every $100 spent through eCommerce, fraudsters stole 5.65 cents.
So how do we resolve this issue and bring back trust to the online retail world?
How online fraud happens
We are creatures of habit. Consumers are known to use the same usernames and passwords combinations across a variety of online profiles, be it social platforms and eCommerce websites. There is only so much information that a consumer’s memory retain and it merely isn’t logical to have a multitude of different passwords for every single website.
But a single compromised email, username and password combination often leads to multiple downstream account compromises, which can be used on online retail sites by taking over a legitimate customers profile. This is done by using the data they retrieved and having the products shipped to another location. This makes it almost impossible for the vendor to identity fraudsters.
While online retail has been growing, so has the need to cater for mobile users. More online users are using the world wide web via tablet or smartphone in comparison to desktop — they are also using the internet to shop online than ever before.
Between 2011 and 2015 mCommerce rose by a whopping 81%, and currently responsible for over half of all internet traffic. Cybercriminals have been quick to pick up on this phenomenon and have been targeting mobile users, with mobile fraud currently representing twice as much online fraud compared to desktop. This is thanks to businesses who rushed to get mobile-friendly, overlooking many security features with their mobile apps that can quickly become fraud magnets.
What can I do to protect my data?
Consumers: Manage your data carefully and ensure that you are not re-using usernames and password combinations elsewhere. This is easier said than done. The average consumer has over 25 profiles and is thought to use a combination of five different passwords across a number of accounts.
Enterprises: Do not store data unless completely necessary. Storing sensitive customer data puts your company and your customers at risk.
How online fraud will be dramatically reduced in the future
The Omnitude team is currently working on a tool that could revolutionise the online world with its Single Identity and Single Reputation, which will help reduce identity theft dramatically.
Our platform will provide all our users with a single identification based on blockchain technology. Blockchain is a valuable tool that will play a major role in how we transact in the future. And it is as valuable as it is secure. It allows people to share valuable data in a secure tamper-proof way, safe in the knowledge that their information is protected.
Customers with an Omnitude Identity (OID) will enter their identity and preference data once, which will be verified by the merchant and then encrypted and recorded on the Omnitude blockchain. Not only will this accelerate and ease the purchasing process, but it also liberates vendors of having to store and protect their databases that contain sensitive information that could lead to a data breach if hacked. This will also help reduce the risk associated with refund fraud by minimizing the use of credit cards.
All information entered on the Omnitude blockchain is stored using innovative software rules that make it impossible to hack, protecting both consumers and businesses.
This technology will also exclude fraudulent actions being performed by sellers such as write-offs of funds and further transfer denial with a step-by-step write-off system on the current stage of the delivery of goods.
Salivating yet? Find out more about how we can protect you and your customers: Omnitude.tech — it’s everything!