Guarding Against Cyber Fraud During Debt Collection

 Posted on July 11,2017 in Debt Collection

Creditors are increasingly utilizing Automated Clearing House networks as part of their payment systems during debt collection. Electronic payments are more than convenient for debtors – they have become expected. However, the impersonal nature of online transactions makes it susceptible to fraud. Cyber criminals are attacking both creditors and debtors, with the goal of accessing private accounts and syphoning money to themselves. Creditors must take action to protect themselves and their customers from online fraud or risk losing substantial amounts of money.

How Fraud Happens?

All online businesses and consumers are vulnerable to phishing scams and malware attacks. Cyber criminals use these techniques to steal identities and access financial accounts. Because of the urgency involved with paying debts, criminals target creditors and debtors:

• Debtors are contacted by fake debt collectors, who hope to receive money or access to a financial account;
• Creditors receive fraudulent electronic payments through fake credit cards and bank accounts; and
• Hackers can hijack a creditor’s website and redirect customers to a site that will accept their electronic payments or install malware.

Consequences of Fraud

Depending on the size of the creditor, cyber fraud can cost thousands to millions of dollars in lost debt payments. Customers who have been defrauded may become unable to pay off their debts. The fraud can have an equally devastating impact on the creditor’s reputation and customer relations. Customers may no longer trust a creditor that they associate with a third party’s fraudulent activity. If the creditor was negligent in protecting the debtor from the fraud, the debtor may attempt to sue the creditor for damages.

Preventing Fraud

As a creditor, you can guard your own interests and instill your customers with confidence by taking the lead in combating online fraud:

• Continuously update your network security protocols and remind your employees to be cautious of suspicious emails and websites;
• Use a multi-stage verification process for electronic payments to decrease the likelihood of fraudulent payments;
• Monitor online accounts and payments daily for suspicious activity;
• Educate your customers on how to identify if a communication is from you; and
• Encourage customers to contact you if they suspect fraudulent activity.

Collecting Debts

Many debtors have become skeptical of online debt collection practices due to the number of scams. Electronic payment systems are risky but a necessary service to stay competitive as a creditor. A Chicago debt collection attorney at Dimand Walinski Law Offices, P.C., can help you securely retrieve debts from your customers. To schedule an appointment, call 312-704-0771.

Source:

https://healpay.com/2016/10/26/trends-in-payment-fraud/