The 3 causes of identity fraud for businesses

01 July 2019

We have written before about the numbers behind identity fraud. Businesses try to prevent damage to their finances and image, but they still frequently fall victim to fraud cases. How do fraudsters continue to succeed in obtaining important information? We have outlined the three main causes of identity fraud for you in this post.

Reason 1: Unsecured transfer of information

It is quick, easy, but not nearly as safe as people think: sending information over email. Personal data, user names, and even passwords are often sent in emails.

Email providers aim to protect their data as securely as possible, of course. Even so, it doesn’t always work to send all information as encrypted data. In fact, it isn’t even their legal obligation. That leaves a window of opportunity for fraudsters to get their hands on sensitive information.

And of course, we are all human. Entering the wrong email address can happen in the blink of an eye. Of all reported data leaks in 2018, 63% involved sending personal data to the wrong recipient, the most common type of data leak. In those cases, it’s a matter of crossing your fingers and hoping the receiving party doesn’t intend to cause harm with any information they receive.

Reason 2: Unsecured data storage

Storing information in a secure environment frequently goes awry. For example, earlier this year, there was a major data breach at UWV, the Dutch Employee Insurance Agency. The result? The leak of 117,000 private documents. The documents could be downloaded by anyone through an employer account that had fallen into the wrong hands. He had not stored the important documentation in a safe environment.

By storing data in a reliable and properly secured environment, you can significantly lower the odds that it ends up in the wrong hands. DataChecker has that level of security because we know how crucial it is to handle your data securely.

Reason 3: Companies don't know their clients well enough

Last year, experts made a new estimate of the scope of money laundering in the Netherlands. On a yearly basis, that amounts to approximately 16 billion euro. About 90% of that amount comes from drug trafficking and fraud. Multiple banks have been fined in the past for not having their money laundering prevention strategies securely in place.

Before doing business, it’s smart to know who your customers or clients are. That can help you minimize the risk of (financial) damage to your business. A solid screening lets you know who you’re about to do business with. It uncovers tax evaders, money launderers, or financiers of terrorist/other criminal activities. 

Here's how to prevent identity fraud

As you just read, the key to avoiding identity fraud is to handle data securely and to know who you’re conducting business with. That sounds logical, but it’s a lot harder in practice. Do you want to prevent cases of identity fraud within your company? DataChecker has solutions for any business, in any sector. Get in touch and we’ll be happy to help you out!