The headlines over the past few years have been crowded with stories about the lack of security when it comes to credit card data. Terms such as data breach and fraud are frequently used, often interchangeably, but are they the same? If not, what is their relationship to each other, and how can each be prevented?
What is a data breach?
A data breach refers to what happens when a criminal interloper somehow gets past the security system a business has set up with the intention of compromising and stealing confidential information. That being said, a data breach can occur without any data ever actually being stolen.
Fraud: The next step.
The simple definition of fraud when it pertains to the credit card and merchant services industry is the unauthorized use of a person’s payment data. Much more complex are the various ways in which fraudulent activity is accomplished. For example, it can be the one-time theft of a credit card from your wallet by your teenager and the subsequent purchase of clothes or jewelry.
More globally, hackers can infiltrate a system and obtain thousands of pieces of data that they later use for large purchases, often hundreds or even thousands of miles away from their point of origin. No matter how you slice it, fraud is an upsetting and costly crime that has detrimentally affected millions of consumers in Europe, Asia and North America.
Signs that you are a victim of a data breach or fraud.
If you are a merchant, you might feel powerless to prevent data breaches and fraud, which often seem to come from anonymous criminals based a great distance from you. However, there are red flags that can help you intercept and possibly even avoid these upsetting incidents:
- Purchase tools that monitor for breaches. Learn about the Payment Card Industry Data Security protocols and be sure you are in compliance.
Keep an eye on your chargebacks. This term refers to disputed charges that do not result in completed sales for your business. If all is well, no more than 1 percent of your transactions will be chargebacks. If you start to see a marked increase, you might be the victim of fraud. - If you think you might have a problem, consult a third-party auditor. They will thoroughly check your systems, identify any possible data breaches or fraud, and work to bring you back into compliance.
- If you suspect fraud, immediately bring up your concerns with your merchant processing company. They can help you to get in touch with the various card brands to identify the source of the breach or fraud.
Data breaches and fraud will never go away and will always pose a security threat for your business. That’s because there will always be people – criminals – who want to get something for nothing and feel they can’t be caught. That being said, understanding the concepts of data breach and fraud and learning how to spot them can give you a good deal of control over your own fate. Anything you can do to safeguard your business against criminal activity is good for your customers, your peace of mind, and your bottom line.
