Payment fraud in the gig economy
The gig economy has seen a surge in popularity in the past few years, with many people relying on it as their primary or secondary source of income. Remote work has become more prevalent due to technological advancements, leading to a rise in freelance jobs and the expansion of the gig economy. However, this increase in gig economy activity has also led to a rise in scams, such as payment fraud.
Payment fraud refers to instances where gig workers or businesses are not paid for their services or are paid with fraudulent payment methods. This can take several forms such as:
- ,Non-payment: Clients or employers may fail to pay gig workers or businesses after services have been rendered, either intentionally or unintentionally.
- Chargebacks: Clients or employers may dispute a charge with their bank or credit card company after paying for services, resulting in the gig worker or business not being paid for their services.
- Payment with stolen credit card: Clients or employers may pay for services using a stolen credit card, which can result in the gig worker or business not being paid or having to pay back the charge once it's discovered.
- Phishing Schemes: Scammers may impersonate clients or employers and ask for sensitive information such as bank account numbers or credit card information, using it to make unauthorized transactions.
How to prevent payment fraud?
Payment fraud is a growing concern in the gig economy, as it can have severe consequences for both workers and customers. Gig workers and businesses can take several steps to prevent payment fraud:
- Use secure payment methods: Use a payment processor that has fraud detection and prevention features. Avoid accepting payments through wire transfers or other methods that are difficult to trace.
- Verify and re-authenticate the identity of clients and employers: Confirm the identity of clients and employers by asking for personal information and validating it. This can be done by putting in place a strong customer authentication solution.
- Keep accurate records of transactions: Keep detailed records of all transactions, including the date, amount, and client or employer information. This can help you to detect fraudulent activity and provide evidence if you need to file a complaint.
- Be aware of red flags: Be vigilant for red flags that may indicate fraud, such as clients or employers requesting a large number of services for a low price, clients or employers who are unwilling to provide personal information, or clients or employers who insist on paying in cash.
- Report suspicious activity: If you suspect fraud, report it immediately to the relevant authorities.
With the increasing number of fraudulent activities and scams in the gig economy, it's essential to have a secure and reliable method for verifying the identity of clients and employers. A strong customer authentication solution can provide an extra layer of security by using advanced authentication methods to confirm the identity of clients and employers before transactions take place. This not only helps to prevent fraud but also gives confidence to the gig workers and businesses that they are working with legitimate clients and employers.
Ready to take your customer authentication to the next level?
When you work with ShareID, you can provide your gig workers and customers with a strong authentication process tied to their government-issued IDs in real time and with a simple smile. With its patented technology, ShareID can validate a person's liveness and all their shared personal data, ensuring the person behind the screen is the right one anytime a transaction with the platform happens. Request a demo today and see how ShareID can help grow your top line.