The trust equation
Trust is a cornerstone of relationships. It is hard to turn it on and off. Our interactions build trust cumulatively. They are the foundation on which businesses thrive and consumer loyalty flourishes.
Last week, the Competition Bureau released data that suggests scams cost Canadian businesses something in the order of $500 million last year. That’s based on an estimate that only 5% of fraud is reported. Both numbers are astonishing. The financial impact is even bigger when you factor in the need for assessment, investigation, system upgrades and more.
The impact of fraud extends beyond financial losses. It can throw off the equilibrium in a relationship because it unseats trust. The customer experience suffers, along with brand reputation. Sometimes, the damage is irreparable. Other times, there are long-lasting repercussions that take resources and time to repair. In some cases, the impact of fraud can be industry-wide.
With the explosive growth in ecommerce and online retail transactions we’ve witnessed over the past year, fraudsters have more opportunities then ever before to defraud legitimate businesses and their customers. Companies need to take security measures, honing their ability to detect and deflect fraudulent transactions, without sacrificing the customer experience.
The CMA is a long-standing member of the Competition Bureau’s Fraud Prevention Forum. Our Consumer Centre contains information to help Canadians avoid fraud, including intel on the most common scams, how to differentiate between spam and legitimate e-mail, and how to protect yourself from pandemic-related fraud. You are welcome to point to this resource when you are communicating with employees and customers about how to avoid fraud.
Educating your customers to be savvy about fraud is key to building trust and brand loyalty.
P.S. Last week, I wrote about Ron Tite’s great allegory of winning auto races by the way you handle the corners. You can hear my conversation with Ron by clicking here.