As compared to the previous year, fraudulent e-commerce transactions increased by 25% during the peak Christmas shopping season in the US in 2021. Fraudsters prefer to take advantage of e-soft commerce’s white underbelly. Realize and handle the growing problem of online shopping fraud. It’s time to take action today. A small firm or an e-commerce startup is particularly vulnerable to e-commerce fraud. A lack of security measures might leave your data vulnerable. Alternatively, you may be unfamiliar with the recommended procedures for securing your data. There is no better method to ensure the safety of your online shop than to take every precaution.
Fraudulent customers and cybercriminals alike commit e-commerce fraud by deceiving you in the course of making purchases. In addition to causing financial losses, this type of fraudulent behaviour may have a negative impact on your reputation, brand image, and customer relations. E-commerce fraud may be committed without the use of a credit card, unlike in brick-and-mortar establishments.
Typically, the sums involved in individual occurrences are small. Because gathering evidence and proving criminal intent requires a great amount of time and work, some of you may just dismiss such occurrences. Online company operators like you can’t ignore how the Internet opens up new markets and levels the playing field. However, it has significant flaws that might be exploited by dishonest clients or cybercriminals.
What are the 7 types of fraud?
Triangulation Fraud
Three people are involved in triangulation fraud: a fraudster, a customer, and an online retailer. Once the consumer completes a transaction through the phoney business, the fraudster utilises the credit card information he or she has obtained to make subsequent purchases through the false storefront, such as on Amazon or eBay. Ecommerce fraud is a serious problem for online firms, and it can cost them a lot of money or perhaps ruin their entire operation. As an owner of a business, you must know how your online store is vulnerable to fraud and apply preventative measures to avoid this from happening.
Interception Fraud
Using the cardholder’s proper billing and shipping information, the fraudster makes the initial transactions but then attempts to intercept the delivery before the cardholder receives it. This is known as interception fraud. Requesting that the box be redirected before it is dispatched or after it has shipped, or even stealing the parcel once it has been physically delivered are all ways in which this can be perpetuated.
Account Takeover
Fraudsters commit account takeover when they get access to a user’s online account information. The user’s passwords or personal information can be used by the fraudster to make transactions or withdraw monies from the account.
Refund Fraud
For example, refund fraud occurs when the thief claims to have purchased something only to have the refund routed to a different account or a payment method that they have control over. As a result, the fraudster gets his money back even if he didn’t buy anything.
Card Testing Fraud
If the stolen credit card information works and the card has a limit, then card testing is taking place. It is common for scammers to test the legitimacy of a site by making a minor transaction to find out what information is missing. The fraudster will make considerably greater transactions if the stolen information is validated.
Clean Fraud
Credit card fraud may take several forms, one of which is clean fraud. An example of clean fraud is a purchase made with the use of a stolen card and the cardholder’s personal information but which seems to be done by the actual cardholder.
Fraudulent Use of a Credit Card
Credit Card Fraud arises when someone uses a stolen credit/debit card to make online purchases. One of the most well-known kinds of online fraud is that which occurs when a card is not physically present at this time of purchase.
Cardholder data such as a name, account number, billing address, CVV code, and expiration date are often accessed by fraudsters in most circumstances.
Once the transaction is completed, the charge is transferred to the account of the legitimate cardholder. When the cardholder files a dispute or the bank flags the transaction as fraudulent, you have to issue a refund. Chargeback costs and other penalties are now your responsibility in addition to the original purchase price of the goods or service.
