Multinational enterprises can withstand a data breach, but small- to medium-sized businesses - and, even more so, their customers - often cannot. Companies in the latter category must labor even more diligently to protect the personal and financial information of the people who keep them running.
"Identity theft affected 16.7 million Americans in 2017."
Reports such as Javelin Strategy's study on the uptick of finance-related fraud and identity theft through 2017 and into 2018 should be sobering to all. But business owners in particular should be mindful of this cybersecurity issue, whether they rely on alternative credit data, traditional scores or a mixture of both.
Breaking down the report
The Javelin study found that identity theft affected 16.7 million Americans during 2017, continuing a trend of steady increases that has taken place since 2014, when this type of fraud befell 12.7 million residents of the U.S. The number of Americans touched by identity theft last dropped between 2013 and 2014.
Interestingly, Javelin's data also found that between 2012 and 2015, the cost of such breaches fell from year to year - from $22.1 billion to $15.5 billion. Only after 2015 did the dollar value of identity theft start rising again, reaching $16.8 billion in 2017, the most recent year for which data is available.
How businesses can help consumers avoid fraud
Individuals need to be careful regarding their financial data, but the sheer number of breaches is too large to put the blame on them alone. Companies can and should do more to safeguard the info with which customers entrust them.
The Consumer Federation of America noted wire transfer as the preferred method of many scam artists. Businesses can help mitigate the issue by not accepting or issuing money orders, accepting other alternative payment methods instead, like PayPal or Venmo. Using lesser-known alternative credit platforms that fraudsters aren't familiar with could also potentially deter their progress.