More than a third of Canada’s electronic subscription service businesses are hit by cyber fraud every day, and that number is rising at a rate of more than 200 per cent.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) says there were about 5.4 million complaints about cyber fraud in 2017.
The fraud was primarily conducted by a large number of businesses that had been set up to make payments online, which is a violation of the law, the report said.
Financial institutions were not immune from cyber fraud.
They too face a problem of paying out more than they have.
In 2017, nearly 5.5 million consumers in Canada had their payments stolen, according to FINTRAC.
In that same year, the number of people whose credit and debit cards were lost in a cyber-attack nearly doubled to 2.4 per cent of the population.
In total, the fraud cost $1.5 billion to date.
Financial institution fraud is not limited to online transactions.
Businesses that have online services that customers use to make online payments, or are paying by direct debit are also at risk.
“The threat of fraud is increasing and continues to increase,” said FINTRACTAC in a statement.
“Fraudulent activities are increasingly targeting consumers with credit card numbers, identity verification and other types of identity data, and these are among the ways fraudsters try to take advantage of weak consumer protections to steal and steal even more.”
It is illegal for online payment processors to ask consumers for their credit card number or other information to facilitate online transactions, which can mean people’s personal information can be sold for money.
It is also illegal for consumers to have the ability to withdraw funds from an account.
If a person’s card is lost or stolen, their payment or account information can go missing.
FINTRACEAC found that more than one-third of those impacted by fraud had been charged with fraud, while less than one per cent had been fined.
About 1.3 million consumers reported being affected by identity theft in 2017, and another two per cent reported having their card information stolen, the watchdog said.
Some businesses have implemented policies to mitigate the risk of fraud and protect consumers from fraudulent activity.
However, the industry continues to face challenges as it tries to prevent fraud and address a growing number of reports of fraud.
For example, more than two-thirds of online merchants surveyed by FINTRADE said they have not been able to prevent a loss or theft of their credit or debit cards, and one-fifth said they do not know how to prevent it.
The report also found that businesses are still trying to make their websites more secure.
A third of online business owners said they had been unable to login to their websites because their websites do not have passwords or the ability for customers to change their passwords.
“Online businesses have been facing cyberattacks, as well as increased cyberthreats related to financial data,” said a report in the Canadian Association of Business Cybersecurity’s newsletter, The Business Intelligence Report.
“As we’ve seen over the last few years, cyberthreat risks and the financial industry are increasing, and it is essential that businesses be proactive in keeping their systems secure.”
The report does not indicate whether online payment service providers will face more cyberattacks as a result of the increase in fraud.
The federal government is looking at the issue.
“We’ve heard that this is a significant problem, and we are committed to protecting Canadians and supporting businesses to take proactive steps to mitigate risk,” said finance minister Joe Oliver in a news release.