With more and more people operating in the e-commerce arena, there’s also been a sharp increase in cyber fraud. And as users continue to share more of their personal information on e-commerce sites, they increase their risk of being victims of fraud.
As an e-commerce merchant, you not only have the responsibility to keep your business safe but your customers too. Here’s a list of the common methods of online fraud so that you can be better equipped to combat them and maintain your brand image strongly.
Chargeback fraud, affectionately termed friendly fraud, happens when someone purchases an item or service from your site but will inform the processor that the transaction was invalid. In doing so, they are reimbursed by the bank but will still receive the product they purchased.
Chargeback fees can be as much as $100 every time and unfortunately, the more it happens on your site, the worse it is for you. Banks increase chargeback fees every time it happens, so you need to use a robust chargeback management system to stop this from happening to you.
Accertify is a leading chargeback management service provider with PCI DSS Level I certification. Accertify helps you fight payment frauds and improves your win rate by up to 50% and that ensures your cash flow is not disturbed due to fraudulent activities.
Credit card fraud
Credit card fraud is the most common form of e-commerce fraud to date. Scammers use all kinds of tricks to get your credit card information, including tampering with ATMs. This method is called credit card skimming and is done by reading and lifting the card details from the magnetic stripe on the back of your card.
In the interest of your business’ safety and the safety of your customers, invest in a cybersecurity program. You can ensure the safety of your customers while they shop, without impacting the overall user experience by regularly educating them about the potential frauds related to debit or credit cards.
Investing in consumer education and installing the right software to boost cybersecurity will prevent such frauds from taking place and hampering your business operations.
Credit card testing
Card testing fraud happens when someone gets their hands on multiple credit card numbers, either through theft or by purchasing them via the dark web. In this instance, the person is trying to test if the card number they have will work for online purchases.
They won’t know the limit on the card, so they usually make very small purchases to test the card number. With the use of bots or scripts, they can run multiple card numbers at once. And because they test on small amounts, it’s only once they’ve made several larger purchases before anyone notices what’s happened.
In phishing, the person committing fraud will pretend to be someone they’re not in hopes of obtaining important customer information like credit card details, personal information, and passwords. The fraudster will call your company posing as a bank employee on behalf of your customer. They will then attempt to confirm the validity of their purchase and to verify their information.
The best way to combat phishing fraud is to keep yourself and your employees informed. Consider developing systems and procedures for storing and sharing customer information. A general rule of thumb is that you should never share customer information with anyone.
Account takeover fraud
This method is exactly as its name suggests, fraudsters gain access to a user’s account information on a website or e-commerce store. With this information, they will attempt to change account details, withdraw funds, and access the user’s other accounts.
The main idea with this method is to extort as much as possible from the victim before they’re caught. They can access user’s accounts by purchasing things like passwords, security codes, and personal information on the dark web. This can harm your reputation and your customers are less likely to return to your site if they fall victim to this scam.