Using stolen payment information for online transactions without the buyer’s knowledge is referred to as eCommerce fraud. It is easy for unscrupulous online stores to steal consumer data and later use it to defraud them. It has become quite easy for hackers to access one’s information due to the large amount of card information that is stored and transferred on an online payment portal.
With everything going digital, fraudsters are becoming more enlightened with every passing year, innovative, and deriving new ways. They step up their game and find new ways to avoid the newly set barriers every time new measures to prevent fraud are taken.
Fraud is a fact of life and business. E-commerce has a higher level of vulnerability than other forms of industry. It is important to learn about the different types of e-commerce fraud and examine steps that you can take to protect yourself. Different types of e-commerce fraud include:
- Friendly fraud,
- Clean fraud,
- Affiliation fraud,
- Triangulation fraud,
- Account takeover fraud
If you own or operate an online store, you must protect yourself against fraudsters who can steal from you and your customers. Fraudsters can wreck your online reputation, alienate your customers, damage your brand, and hurt your profits.
E-commerce fraud can be spotted in a number of ways. The success of e-commerce fraud depends on the skill and ingenuity of the fraudsters. Common red flags consist of:
- Multiple shipping addresses,
- Many transactions in a short time frame,
- Multiple orders from many credit cards,
- Multiple declined transactions in a row,
- Strings of orders from a new country,
- Inconsistent order data,
- Larger than average order,
- Unusual location.
Prevention is always better than cure. Taking preventative measures will reduce fraud risks. There are a number of different things that e-commerce retailers can do to reduce fraud. Firstly, retailers can check that company URLs are in the encrypted ‘HTTPS’ format to ensure that the information on their site remains confidential. Another safeguard is to update passwords on a regular basis. When purchases are made, retailers can request Address Verification and Card Code Verification in their payment gateway to detect impersonators. It’s also important to set out clear policies concerning reshipping, refunds, and returns.
Some preventative measures include:
Use an Address Verification Service (AVS).
Avoid collecting too much sensitive customer data.
Try an anti-fraud solution.
Set limits on purchases.
Conduct regular site security audits.
Make sure your store is Payment Card Industry (PCI) compliant.
Monitor your site regularly for suspicious activity.