Fraudulent transactions and breaches of customer privacy are major blows to any business. Therefore, it is important for every company in the field of e-commerce to provide protection from fraudsters. Find out what kinds of fraud there are and how to deal with them.
How to counteract fraud in e-commerce
On average, e-commerce fraud causes companies to lose large sums of up to 3 percent of their annual revenue. Online stores are attacked monthly by cybercriminals and unscrupulous actors. If you have your own e-commerce business, you must think about how to protect yourself from scammers. They can spoil and tarnish an upstanding brand's reputation, alienate customers, and reduce profits.
For online stores, fraud most often targets payment processes for many different services and goods. Online scams are a form of criminal deception during transactions for personal or financial gain.
There are a variety of online scams that you should know about in order to protect your business.
Top 5 kinds of machination in e-commerce
Scammers on the internet continue to develop new techniques. We are going to discuss the five most popular schemes.
Card Hacking or Testing
Card hacking occurs when an outsider gets access to a customer's bank or credit card information. They can steal this data directly or buy it from other cybercriminals.
But knowing the card number does not mean actually having the ability to initiate transactions. Therefore, attackers conduct test purchases on different websites, often using scripts to quickly check credit card numbers. This is the first stage because they help to see if it's possible to use a debit or credit card in real life. If the card is functioning, the hackers start making different, more expensive purchases.
During the testing period of the card, the seller and the buyer may not know that anything is wrong. People understand that they have become victims of fraudsters when large amounts are charged to a credit card. This is a hard blow to the company's reputation since customers will be reluctant to shop at a store that has a history of being hacked.
“Friendly Fraud" and Refund Scams
The essence of deception is that a person buys a product or service on the internet but then demands a refund or redelivery of the goods. According to the customer, it was not received or arrived damaged during transportation. The chargeback commonly involves receiving funds from the seller through the credit card used to make the purchase. After a while, the bank or credit card sends the funds to the customer.
In many cases, this scheme is used in order to get products at no cost. The reason for a refund can seem honest and plausible, giving the entire transaction a friendly appearance.
Scammers can use stolen credit card information to shop online, but the scheme doesn't always end there. Fraudsters sometimes call the online store, saying that they found the product cheaper elsewhere while asking for a refund.
An important point: The fraudster claims that the money needs to be returned to another account because the credit card with which the original payment was made has already been closed. For the owner of an online store, such a request looks quite legitimate, so the company returns the money. However, no one cancels the initial payment, so the e-commerce company is responsible for the full amount to the cardholder whose data the fraudster used in the first place.
Money-back fraud is one of the most dangerous problems. This type of scam is growing rapidly and steals money from the owner of the e-commerce business in question.
Fraudsters can access user accounts, change data, withdraw money, and make purchases with stolen information. How is this dangerous for businesses? Customers will have a negative view of a compromised company, and it will lose its image as a reliable place to shop. Building trust is very important for improving the ranking of a site. Customers who have had their data stolen may consider that brand's website dangerous. If so, they're far more likely to go to competitors to protect their confidential information.
Fraud with a fake website
Online criminals create fake websites that are visually exactly like yours. But they set lower prices. Some scammers even advertise them on third-party resources. Of course, the site does not sell any products. And his main goal is to get money for the product that a person wants to buy. As a result, the buyer remains deceived and considers your store unscrupulous. This harms the image of the eCommerce business and the company's profits.
How to protect a brand from online scammers
Our Evinent Analytics tool will help protect your company from losing reputation and money. Our automation platform "highlights" anomalies in business: with transactions, bonus cards, purchases and others. The system uses machine learning algorithms and creates a protection strategy. So there is no need to spend money on attracting a cybersecurity service – our experience and successful cases allow us to guarantee assistance in detecting fraudulent attacks.
With Evinent Analytics, you will receive customer and analytical support to improve the needs of your business. We will regularly provide reports on your vulnerabilities, as well as develop response plans.