What is E-Commerce Fraud?
A woman scrolling through her Instagram comes across a beautiful lime green color saree, she decides to buy it via this online page on Instagram for the amount of Rs 2000. A few days later when she receives the parcel and finds out the saree was not what she ordered and was also torn out in between. Trying to reach the online portal from where she bought the saree, she calls them again and again but they are unresponsive, and after a day their page also becomes inactive. This is one case that takes place in one second of the day. E-Commerce fraud has been on the rise since the internet was invented, and with e-commerce, industry increasing every minute into a gigantic earth-like world, the cases are set to increase. According to the Nilson report in 2015, 500% of cases rose in 3 years
So what is E-Commerce Fraud?
E-commerce fraud is when a transaction is done illegally, which includes stealing or using fake credit card details to make a purchase. The E-commerce industry has been growing rapidly after the internet changed the world. The industry has become a major part of the economy, an article by C? hainStoreAge ? reports online sales to reach $645 Billion in the US in FY 2020. However, the number of frauds taking place is also increasing every year.
Source- Business Today
Types of E-Commerce Fraud
The major kinds of E-commerce frauds:
- I?dentity Theft
This particular theft is ancient of all, where the hackers main target is to get personal information that includes Name, Address, Email. Here the hackers instead of creating a new identity to commit an e-commerce fraud, use an existing identity by figuring out personal information and then using their card information for the transactions. One of the most famous types of personal theft includes Phishing where the main idea is to retract personal data of people via fake messages, mail, and websites.
2. F?riendly Fraud
The fraud where customers after receiving a product claim that the product was not delivered. The fraud is also known as chargeback, as the customer demands a full refund on the transaction via claiming that they never received the product.
3. C?lean Fraud
The clean fraud is making a transaction look legitimate but only with a stolen credit card information. Here the cybercriminals collect the credit card information from fake calls, or dark websites to make a transaction. This type of fraud is hard to trace as they dont get flagged and escape the red signal on fraudulent transactions.
4. Merchant Fraud
The most famous kind of fraud where the customer fooled with objects offered at low prices, but only to be delivered once paid. Here the delivery is never made but the payment and details of the customer are stored. The merchant.
5. Refund Fraud
Similar to friendly fraud, here the customer claims the money debited from there was more and asks for a reimbursement. The customer is using stolen card details on a fraudulent transaction to get money.
6. T? riangulation Fraud
Here the hacker makes a website offering cheap prices for the product offered by a real e-commerce website. The customer then places orders in a fraudulent website, post which hacker steals the credit card information to order from the real website using the stolen information
.
How to Prevent E-Commerce Fraud
After understanding E-commerce frauds, and various type of it, it has become essential to prevent them as well. Heres how E-Commerce fraud prevention can be done from keeping a keen eye on the signals that are malicious or suspicious.
A. Address Verification System (AVS)-? The process of verifying the address of the customer from the address mentioned in the credit card companies record help to flag fraud transactions.
B. PCI Regulations-? Payment Card Industry has laid out security regulations for the e-commerce industry, following them and will help e-commerce websites to save themselves from becoming victims of frauds taking place by hackers both inside and outside the country borders.
C. A Strict Password is More Important than You Think!
Having a complicated password helps the customer more security as it becomes difficult for hackers to solve it. So websites should enroll it during the sign up process, a two-three stage process of passwords for better security.
D. Routine monitoring of Accounts and Transactions😕 The routine monitoring helps the e-commerce websites to trace and catch early signs of the fraudulent transaction. As any suspicious change noticed will help e-commerce platforms to stop it at an early stage.
E. Keeping Softwares and Platforms up to date?: with routine monitoring, it is also to keep software and platforms up to date so that it helps trace any malfunction immediately. The tools to prevent fraud arent up to date and will lead to more e-commerce fraud on the platforms.
Tools that help in E-Commerce Prevention
Even though websites are proactive in keeping an eye on suspicious signals it has become necessary to use E-commerce protection tools. The hackers are coming up with new techniques every time and tools will help the platforms to secure better.
Here is the list of tools that can be used to secure your E-commerce websites.
- Subuno😕 Color warning tools and verification
The Subuno tool helps to detect frauds with 20+ tools, it also enquires the location details mentioned by the customer to his credit card records for accuracy.
Subuno provides color warning tools to notice any malicious transaction and recognizes 100+ risk factors.
2. Riskified😕 Real-time Insights
The tools greatest asset is to give anti-fraud services real-time time insights that give a clear picture of how the fraud is taking place. The tool also ditches the old red flag signal notification and gives an upper hand to websites by choosing a decline or approve on any suspicious transaction.
3. Fraudlabs Pro😕 Access to Screening of blacklisted accounts
The tool provides 40+ validation rules and blacklist accounts screening for effective E-commerce protection via screening. Services provided by the tool: Email verification, Profile query, ISP usage, Email Domain age, high-risk user name, and password.
Image Credit: E-commerce via rawpixel/Shutterstock