Fear the human factor

Little is made of the perennial weakest link in the prevention of fraud: human error

While fraud - and credit card fraud in particular - is hardly a new phenomenon in the channel, instances of it are increasing at a worrying rate.

Part of this problem is naturally attributed to the increase in so-called high-tech crime. Recent figures from the National High-Tech Crime Unit have shown that nearly four-fifths of the UK firms it surveyed were hit by some sort of high-tech crime last year.

Meanwhile, figures released recently by the Association of Payment Clearing Services revealed that incidents of 'card not present' fraud rocketed by 68 per cent last year.

However, despite these alarming figures, little is made of the perennial weakest link in the prevention of fraud: human error.

It is easy to point the finger at the internet as the catalyst for the increase in fraud, but culpability belongs, in a large number of cases, to humans.

And while I may be starting to sound like a broken record, it is worth reiterating that vigilance is still one of the most important deterrents in the war on fraud.

A contact at a distributor I was talking to last week told me of an instance where an identity fraudster was attempting to use his name and business address to obtain equipment from another distributor.

Fortunately, the distributor that received the request rang the person whose identity had been stolen to check - after all, most disties would be immediately wary if a rival tried to obtain stock from them.

This time the firm was lucky because the fraudster had not banked on distributor best practices, but in other cases the tell-tale signals are not observed. And these sort of mistakes are costing the channel thousands in lost revenue every year.

To prevent such things as identity fraud, channel players should remember to look out for the warning signs: mobile telephone numbers being used as the main trading number, suspicious addresses or unusual quantities of orders.

It may sound obvious but when a fat commission check is dangling before your eyes it's easy to be blinded to the signs of danger.