The number of people using multiple aliases, on top of having poor credit records, is on the rise says Credit Bureau, Veda.
It is a problem that “can take hold in organisations that are not equipped to tackle it, or do not understand its impact,” Managing Director New Zealand and International, John Roberts said.
He said that 216,000 New Zealanders, over the age of 18, use more than one name to apply for credit, and have an adverse credit history.
To avoid credit fraud, Roberts advises retailers the following: When offering credit always verify your customers’ identity prior to completing your credit check; Protect your own identity and manage your credit reputation; By being informed, you can more proactively manage your credit file; Know your suppliers; Maintain up-to-date customer records; Fraud does not always mean application fraud – pre-vet employees as a safety measure; Contact Veda to discuss Electronic Identity Verification Solutions.
Roberts said that in the last six months alone Veda’s database shows that 4200 (or nearly 6%) of Kiwis who have applied for credit have more than one alias on their file and an adverse credit history.
“In a world where identity and credit fraud is on the increase, businesses need to be more active in protecting themselves and ensure that the information they are receiving from their credit bureau is robust enough, and cross check all the information on the individual,” he said.
The above article appeared in Retail News, a web-based newsletter and communication service from Wellington and has been reproduced here with the permission of its Editor Mike Booker. Retail News supports the Indian Newslink Indian Business Awards, especially the ‘Business Excellence in Retail Trade’ category. The following article that appeared in Retail News (March 14, 2014) is of interest.
Risks gain mobility with handset payments
Andrew Weaver, New Zealand Country Manager, ‘Payments Consulting Network’ discusses the threats smaller New Zealand retailers face from mobile payments.
Accepting payments has never been easier with a multitude of mobile point of sale and smartphone/tablet solutions available. However, convenience may come with unexpected and unwelcome costs of fraud for retailers.
Good & Bad
The good news is that you can protect yourself. The bad news is that these protection techniques are often overlooked when new payment technologies or channels are introduced.
Fraud is a constant threat in the world of payments, with credit cards a particular target. Quite apart from the inconvenience and disruption associated with fraud, the financial costs may be much higher than loss of goods or services if the payment becomes subject to ‘chargeback’ (where the Issuer of the card must be reimbursed for the fraudulent payment).
An understanding of risk is fundamental to any business, and the acceptance of payments is no different. Major credit card companies have worked with the local market to reduce the likelihood of fraud, such as with the introduction of EMV ‘chip’ terminals and cards. The technology involved in a chip transaction ensures that it is virtually impossible to produce a counterfeit version, which was the most common type of fraud in Australasia in the first decade of the new century.
EMV (Europay, MasterCard and Visa) technology has become the worldwide standard for the security of point of sale transactions, with the US being the last major market to signal adoption in the coming years.
EMV certified devices are fundamental to effective fraud prevention when the merchant and the customer are face to face. A number of self-contained and standalone POS terminals are 3G-enabled and can be used by a mobile workforce or retailer.
Similarly, a number of EMV-approved add-on devices can be used to turn a smartphone or tablet into a virtual POS terminal.
What is critical to note is that some seemingly cheap US-originated solutions such as the early versions of Square and the proposed Loop system are not EMV Chip solutions, relying instead on much less secure magnetic stripe technology that is prone to counterfeit.
Such solutions are not likely to be approved for use in New Zealand, and even if they were the liability for fraudulent transactions would rest with the merchant.
Mobile payments can also be made via eCommerce type solutions where card numbers are manually keyed into a smartphone/tablet, typically when the merchant and cardholder are not face to face (generally known as ‘card not present’ transactions).
Liability for fraud on these transactions normally rests with the merchant, and places the onus on the merchant to confirm the cardholder is legitimate.
The cost of ‘card not present’ chargebacks is often underestimated by merchants, especially when moving into remote payments from a ‘bricks and mortar’ operations.
Merchants can protect themselves in a number of ways, utilising automated solutions as well as manual procedures to reduce the likelihood of fraud.
Examples include manual review of high risk and/or high value transactions, customer address validation, SMS one time password authentication, 3D Secure, device fingerprinting, IP or GPS geo-location and hosted risk scoring services.
These techniques are sometimes forgotten when new payment technologies or channels arrive on the market. A proactive and deliberate assessment of risk is essential for any merchant considering mobile payment acceptance.
A clear understanding of risk will assist any business in finding the ‘sweet spot’ of maximising revenue whilst reducing fraud losses, balancing technology investment and customer experience.