Small, Medium Businesses Being Hit Hard by Fraud
More than half of the small and medium businesses participating in a recent study said they have been victimized by fraud in the past year and 43% said they had moved banking business because of it.
The study found that 56% had experienced fraud in the past 12 months and 61% of them said they had been victimized more than once. Online account takeover or fraud accounted for 75% of the incidents.
The report also said that 78% of the time, banks failed to catch fraud involving fund transfers or information identity theft, and that stolen funds were recovered for only 10% of the businesses.
In the rest of the cases, banks took the losses 37% of the time and reimbursed the businesses, the report said, adding that 70% felt their banks should be ultimately responsible for securing online accounts.
Meanwhile, 43% said they moved business elsewhere after being victimized by fraud, including 10% who completely terminated their relationships. The rest moved primary cash management services, the report said.
This year’s numbers were similar to last year’s study, Guardian Analytics and the Ponemon Institute said.
"This year’s data again affirms that businesses’ trust in their banks is quickly damaged and they are not willing to give their banks a second chance," said Larry Ponemon, chairman and founder of the Ponemon Institute.
"As online and mobile banking adoption continues to grow, the possibility for more fraud and more lost customers escalates. Endpoint security will be challenged to keep up with the growing number of devices and threats," he said.