Ecommerce is one way to make a living online. Over the past decade, online sales have increased steadily. This trend was even more evident after COVID-19 brought everyone inside. Ecommerce fraud has increased due to ecommerce’s growth. Ecommerce fraud losses exceeded 2020 by 14% last year, reaching more than 20 billion dollars.
How can you avoid financial disasters due to ecommerce fraud This article will explain how fraud can impact your online business and how to spot it. It also explains the steps you can take prevent fraud from happening.
What is ecommerce fraud?
Ecommerce fraud is when an individual tries to deceive an internet retailer in order to steal money, data or products from the merchant. Fraudsters can trick ecommerce algorithms to send products to businesses without having the intention of paying for them with a verified account.
Ecommerce business owners need to have a plan for fighting fraud as scammers are getting better at tricking merchants. This includes verifying identities, using backend tools that prevent spam and phishing, as well as protecting your assets with comprehensive insurance policies.
Different types of ecommerce fraud
Over the years, ecommerce fraud has changed from exploiting cardholders into full-blown fraudulent campaigns. Let’s look at six types of ecommerce fraudulent activity so you have a better understanding of how to prevent ecommerce fraud.
Card not present fraud is when someone makes a purchase using a card they do not have. CNP fraud is common in ecommerce due to its digital nature. While almost all ecommerce stores require cardholders to verify their CVV codes to verify that they have the account, fraudsters know how to access this information via phishing scams or hacker marketplaces.
A chargeback is when a customer charges back after receiving their item in order to keep their money and the product. Chargebacks are not always done intentionally. Friendly fraud occurs when a chargeback is made accidentally. Although it is not malicious, friendly fraudulent acts still account for 40 to 80 percent of ecommerce fraud losses.
ccount Takeover Fraud
ATO fraud is when someone takes control of a customer’s account, uses it to purchase items, redeem reward points, etc. Phishing scams are used to steal login credentials from customers. They impersonate legitimate businesses to gain their trust and trick them into giving out relevant account information.
ccount Enrollment Fraud
This fraud is very similar to ATO fraud except that the scammer does not take over an existing user’s accounts. Instead, he uses stolen credit card information in order to open an account at an ecommerce site.
Mail Interception Fraud
A scammer takes a credit card from a cardholder and then uses it to ship goods to that cardholder’s real address. The scammer calls customer service to alter the shipping address before the package arrives. This clever trick bypasses fraud detection systems and steals cardholders’ money as well as the online business.
Fraudsters can trick customers into giving out personal and financial information by impersonating brands. To trick victims into giving their personal information, fraudsters use logos and other insignia.
Identify ecommerce fraud
Ecommerce fraud can have devastating effects on your business. Learn how to spot it and help prevent more damage.
These are signs that ecommerce fraud could be detected.
When you log in to your new device, you receive an email notification about a new login.
Prevent ecommerce fraud
Ecommerce fraud prevention is not a one-size fits all solution. However, you can avoid ecommerce fraud by using a combination of all or some of these tips.
Deploy Multi-Factor Authentication
Multi-Factor Authentication allows customers to access their accounts using multiple authentication methods. MFA adds an extra layer of security to your ecommerce site and the financial information of your customers, even though there is some friction involved.
Pay card industry standards
PCI compliance (payment card industry standards) helps merchants to identify weaknesses and prevent credit cards fraud. It enforces data security best practices for ecommerce businesses and other legal requirements.
Secure your email with a password
Business owners need to develop protocols to protect their email. Phishing emails account for 91% of all fraud attacks. Businesses must use digital tools to prevent spam, phishing, and other fraudulent emails under new email marketing regulations.
SSL encryption is available.
SSL certificates protect ecommerce websites by encrypting sensitive information to keep it hidden from unauthorised parties. SSL encryption increases customer confidence as they know your site is dedicated to data protection and preventing ecommerce fraud.
Software to detect fraud
You must be able detect suspicious orders if you want to stop fraud from happening. Volusion Fraud Score offers a comprehensive risk assessment that includes transaction details, geolocation, device tracking and more.
Every year, thousands of ecommerce companies are victim to ecommerce fraud. This can lead to financial ruin and brand damage. Ecommerce fraud can be prevented by learning about the different types of fraud and identifying the warning signs.
By: Shanice Jones
Title: How to Recognize Ecommerce Fraud and Protect Your Customers
Sourced From: www.volusion.com/blog/how-to-recognize-ecommerce-fraud-and-protect-your-customers/
Published Date: Wed, 12 Jan 2022 22:00:36 GMT
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