Small business owners operate in an online world of opportunities — and threats. Those dangers are the effect of fraudsters, thieves, hackers and bots with a singular mission: To deceive customers, thereby depriving a company of a sale, while reaping the rewards of their own game of misdirection and corruption.
On the one hand, we already know about the issue of fraud — we understand its existence and proliferation throughout the web. But on the other, we are less familiar with its consequences for small business owners and independent retailers.
It is one thing to safeguard our credit card and checking accounts, in addition to taking precautions to lessen the probability of identity theft, or various Ponzi schemes or sundry forms of entrapment.
It is something else to be aware of, and to have a solution against, fraud that disproportionately strikes at the heart of our economy. For example: Imagine the cumulative result of a series of petty thefts — a series of interrupted transactions — where a shopper goes to one site, and, unbeknownst to that person, buys a product from another site. These acts of fraud are so convincing, and the incremental nature of the deception is so subtle, that few if any customers or small business owners realize they are victims of such elaborate charades.
And yet, by stealing a handful of cents per transaction here — or even a few dollars per purchase there — the overall number is in the billions. Translation: Small business owners often do not have the means to retaliate, leaving them vulnerable to losses or insolvency.
“We recognize that identity theft and unlawful debt collection practices continue to cause significant harm to many consumers,” says Jessica Rich, director of the of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection.
“Steps like the recent upgrade to IdentityTheft.gov and our leadership of a nationwide initiative to combat unlawful debt collection practices are critical to our ongoing work to protect consumers from these harms,” Rich adds.
Adam Rogas, co-founder and CEO of NS8, a company that offers a collection of tools designed to prevent fraud, says:
“Online threats originate from a multitude of sources, representing a global problem of profound financial consequences. These acts of fraud undermine the credibility of hardworking small business owners, while incremental thefts become monumental in size. The best way to deter these attacks is through on-the-ground monitoring and review of every purported customer.”
Rogas further explains that an ever-growing amount of web traffic comes from bots, spiders, extensions, headless browsers, toolbars and other actors. The increasing sophistication of the ways these bots disguise themselves requires continuous — and constantly evolving — means of detection.
Bear in mind, too, that the more money small business owners must spend — unsuccessfully — on conventional methods of detection, the less money they have for marketing and advertising. With the average amount ($10,000) independent retailers devote to promotions — both online and offline — the more difficult it becomes to maintain that figure and repel fraudsters. In other words, marketing budgets dissolve in the effort to wage war against fraud.
If fraudsters continue with their tactics of misdirection, if they expand the number and frequency of their duplicitous transactions, then small business owners will soon find themselves personally bereft and professionally bankrupt.
We must confront the severity of this matter, because we must do everything possible to end this threat.
Small business owners do not deserve to endure more of this economic pain, and consumers should not have to suffer more of this financial hardship.
Now is our summons to stop fraud.