The shift in buying patterns and the impact of the COVID-19 outbreak in 2020 have led to the dominance of eCommerce enterprises in the worldwide marketplace. However, as the frequency of online purchases has grown, so too has the number of scams. Hiring an eCommerce fraud prevention company is the only way to run a secure business in today’s day and age. In this post, we’ll look at the types of eCommerce fraud and the precautions you should take to keep yourself safe.
Why Is Ecommerce Fraud Rising?
Cybersecurity and fraud detection technologies haven’t been evolving quickly enough to keep up with online shopping’s 209% year-on-year boom. In the long run, firms lose around 7.5% of their yearly income because of these frauds.
Types of eCommerce Frauds and Ways To Prevent Them
- Card Testing Fraud
Card testing attacks are carried out by cyber thieves who make minor charges on a credit card to see whether it would work for larger purchases. Also referred to as “card skimming,” these types of fraud generally target smaller firms, such as those that accept microtransactions with less stringent verification standards or those that rely on donations and hence may not have the means to spot them. These attacks may lead to:
- Forcing firms to pay back the money they have already spent.
- Bank fines and additional costs for unauthorized transactions.
- Increased payment refusal rates may indicate to banks that your company account poses a significant risk.
Because stolen credit cards are frequently canceled and reported, thieves may make relatively modest transactions to avoid alerting the owner to any fraudulent activity. Typical card testing fraud indicators include a large number of refused card alerts and a large number of minor purchases.
- Chargeback Fraud
Chargeback fraud happens when a client makes a genuine purchase and then accuses the transaction to the credit card provider to collect a refund. Chargeback fraud can occasionally be characterized as friendly fraud, in which the cardholder is involved or benefits in some way from the purchase.
There are various reasons why the cardholder may request a refund: they may regret making the transaction, forget they made it, or believe their card was used by some other. In order to minimize chargeback fraud, here are a few tips:
- Using safe and reliable credit card verification tools.
- Sending a confirmation email when an order has been placed. As a result, customers are less likely to claim that they never purchased anything, and there is a transaction record.
- Providing clients with precise information about how the transaction will appear on their bank statements.
- Triangulation Fraud
From 2020 to 2021, the total amount of money lost to fraudulent transactions has grown by 18%, from $17.5 billion in 2020 to $20 billion in 2021. Triangulation fraud occurs when an honest buyer makes a genuine purchase from a fraudster on a third-party marketplace, who then purchases from the original store using stolen credit card information.
This form of fraud is a complex and growing problem that is peculiar to online merchants, particularly those whose business models entail selling on behalf of wholesalers and do not need direct customer-supplier contacts. Triangulation fraud may be difficult to detect; thus, it is critical to have systems and procedures that automatically identify suspicious activities.
- Account Takeover Fraud
Account takeover fraud happens when a fraudster obtains control of a genuine customer’s account. This may also include the hijacking of employee/business accounts in order to get sensitive information about clients by appearing as an official account. To further complicate matters, bots are now being employed to automate the process of getting access to accounts by brute force.
Customers’ accounts can be safeguarded by implementing the following strategies:
- Login attempts from visitors suspected of being part of a bot network should be flagged and blocked.
- Utilize reliable visitor detection algorithms and demand further verification from new/untrusted visitors before giving access.
Account takeover fraud can cost you money in the form of chargebacks and penalties, but it can be avoided by safeguarding users’ accounts against it.
- Interception Fraud
It is possible for thieves to get sensitive information by intercepting data exchanged between two parties in the form of intercept fraud. Interception fraud may include:
- Intercepting critical emails before they reach their intended destination and impersonating the sender to collect sensitive information from the client.
- In order to obtain customer email and password information, setting up a fake login page on a real website. The stolen credentials can then be used to connect to the legitimate website and conduct fraudulent transactions.
- Infecting websites or devices with malware to steal sensitive data such as email addresses or account login credentials.
Customers’ personal information and financial transactions should be safeguarded by various security measures, including site-wide encryption while making a purchase. By proactively identifying unwanted visitors and associated patterns of fraudulent behavior, eCommerce site owners may mitigate the risk of compromise.
Hi, I am Adam Smith, Admin Of TechSketcher, Creative blogger and Digital Marketer.