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How to Protect Consumers and Businesses against Cyber Fraud

By: Floyd Arthur

According to the data mining website Statista, there are a little over 191 million online shoppers in the United States, a number that’s projected to grow to over 210 million by 2017. Consumers today are search for and buying nearly everything online—from shoes to car insurance to home repairs. By 2017, 60 percent of all U.S. retail sales will involve the Internet in some way, according to a recent report by Forrester Research Inc. Business-to-business e-commerce is equally as brisk, accounting for nearly 5.29 billion in manufacturing and merchant wholesale revenue in 2013.

Unfortunately, greater interconnectivity goes hand in hand with increased risk to consumers and businesses alike. According to the Identity Theft Resource Center, there were 217 data breeches in the U.S. business sector alone in 2015, resulting in the compromise of over 16 million accounts. Furthermore, according to the Bureau of Justice Statistics:

Over 17.5 million Americans were victims of identity theft in 2014 Most thefts (86 percent) involved the use of an existing credit card or bank account A smaller number (4 percent) involved the theft of personal information used to open a

new accounts or commit various types of fraud

How Business Owners Can Protect Consumers from Cyber Fraud

In addition to maintaining the highest encryption standards as a matter of course, businesses can protect customer data in a number of ways. The cyber-insurance experts at Beazley recommend the following:

Update all software automatically to minimize security gaps. Out of date software, even if it is not used to store customer data, is an easy point of entry for cyber thieves.

Encrypt data on all devices that employees use to handle company business, including smartphones, tablets and laptops. As more and more employees use personal devices both at home and at work, this is an especially critical step.

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Carmoon Group Ltd. Business Insurance Hempstead New York

Train employees on proper security techniques. According to Beazley, overhalf of all data breaches in 2013 occurred as a result of employee mistakes, such as sending emails to the wrong recipients (31 percent) and losing paper records (24 percent.)

Require all employees to use strong passwords. A strong password is at least eight characters long, and contains both upper and lower case letters as well as numbers and special characters, says Microsoft. Passwords should not include full words, names or birthdays. It’s also a good idea to have passwords expire at least every 30 days.

Review all electronic correspondence before it goes out to ensure it is going to appropriate personnel. Train employees to avoid the “Reply all” function when responding to a sensitive email.

Train employees to recognize phishing scams and never send customer information in an email.

How Consumers Can Protect Themselves from Cyber Fraud

Businesses have a responsibility to protect consumer data, and the consequences of failing to do so can be severe. According to a 2014 Ponemon Institute study, the average cost of a data breach to companies was $3.5 million in 2013.

Nevertheless, consumers also have a responsibility to be conscientious and keep their information safe. In addition to following the recommendations above,the online safety website Stop, Think, Connect recommends that all Internet users take the following simple precautions:

Use a good antivirus program and firewall on any computer that connects to the Internet. These programs are standard on any device running Windows 8 or above, but you may wish to add additional protection with a program from a software provider such as Norton, Kaspersky or McAfee.

Discard or mark as “junk” all unwanted email:Email links are a common gateway for cyber thieves. If you receive an email that looks odd, don’t open it. If you do open it, do not reply to it or click through any links.

No reputable company will ever ask for account numbers or passwords in an email. Immediately report any email that does so to the company named in the message (preferably via phone call.)

Avoid using unsecured Wi-Fi hotspots for shopping online or accessing secure accounts.

Floyd Arthur Insurance Expert New York

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Carmoon Group Ltd. Business Insurance Hempstead New York

When shopping online, use secure websites. You can easily spot these by their Web addresses, or URLs, which will start with https:// .

Report any illegal activity on your accounts, no matter how small.

Knowing how to protect yourself and your customers from cyber fraud can protect your business from the consequences of a data breech. Nevertheless, the incidence of cyber fraud is growing, and no business is immune. Don’t assume that your commercial liability insurance is enough to protect you in the event of a loss. Contact one of our business insurance experts to discuss your needs today. We are available Monday through Friday from 9 a.m. to 6 p.m. Just call 516-292-3780 to set up an appointment, or request a free consultation online now.

Floyd Arthur Insurance Expert New York

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