We can all agree that eCommerce has become a significant part of our daily lives. Whether it’s buying clothes, getting food delivered, or buying tickets for a variety of events, more and more have turned online to get what they want with just the click of a button. But due to the convenience brought by eCommerce, it is also an opportunity for scammers to exploit vulnerabilities in order to extract money from unsuspecting victims.
What is eCommerce fraud?
Although it seems like eCommerce fraud is a new issue, there have been repeated cases of credit card fraud since the early days of eCommerce. But through the years, cybercriminals have evolved and used more subtle ways to con money out of victims. Nowadays, not only are credit cards at risk but also online banking accounts which allow cybercriminals to transfer money into their accounts.
Methods used in eCommerce fraud:
- Phishing – the act of sending messages that appear to come from reputable companies in order to get sensitive information such as usernames, passwords, and credit card details through emails or websites. This tactic is commonly used because cybercriminals can easily set up a fake website that is almost identical to the original one.
- Malware – this refers to computer programs that are intended to damage or disable computers and computer systems. Malware could also track keystrokes which include important information such as usernames, passwords, and other sensitive data. This tactic is often used due to the fact that cybercriminals can easily obtain passwords and keystrokes that victims enter into their browsers.
- Pharming – the act of compromising computer systems in such a way as to gain control over them or redirect users to other websites without their consent for the exploitation of personal information. Once again, this tactic is common due to how easy it is to insert code that can redirect some URLs to a different website.
- Botnets – these are networks of computers that have been compromised and can be controlled remotely by cybercriminals to perform tasks such as sending spam emails, DDoS attacks, and other malicious activities.
- Unsolicited email – spam emails have become a more efficient way of spreading malware as it is easier for cybercriminals to create large volumes of them and target a wide audience. They can also use this tactic as a means to distribute ransomware which encrypts the victim’s files and demands money to be paid in order to decrypt the files.
- The dark web – The dark web is part of the internet that is not indexed by search engines and cannot be accessed using conventional ways. It can only be accessed with special software that allows users to remain anonymous. Activities such as eCommerce fraud, buying stolen credit card details and other sensitive information are common in this portion of the Internet.
- Chargebacks – chargebacks happen after a purchase has been made, but the buyer requests to cancel the transaction or claims that they did not receive their order. This often happens because credit card details have been stolen and are being used for fraudulent transactions. If this is done excessively, the merchant’s account could be shut down by the bank which is a risk that most merchants try to avoid.
How to protect yourself as a customer from eCommerce fraud:
-Avoid using public Wi-Fi when making a purchase as it is not secure. Make sure you use your own data connection instead.
-Check the URL of the website before entering any information, especially usernames and passwords. If anything looks suspicious, do not continue on.
-Check multiple sites to see if the same product is being offered at a cheaper price. This could mean that you are visiting a fake site and should leave immediately.
-Look for lock icons, green addresses, and HTTPS in the URL bar to ensure secure browsing. If any of these options do not appear on your browser, it might be an indication of a fake site.
-Check the “Secure” icon in your website address to make sure that you are not on a fake, non-secure page. If it does not appear, this might also mean that you have accidentally landed on the wrong page and should leave immediately.
-Make sure to use reputable online shopping websites and do not click on links in emails from companies that you are unfamiliar with.
-When making a purchase online, use PayPal or credit card transactions instead of direct debit in order to ensure the safety and security of your money and personal information.
-If anything seems suspicious when making a purchase, contact the website’s customer service team before completing the transaction to inquire further about the product and ask them if they have experienced any fraudulent activity.
What measures should merchants take in order to protect their eCommerce business from fraud?
-Make sure that all online transactions go through a secure payment gateway. This helps keep customers safe by encrypting their credit card details and personal information. It also helps protect the merchant from financial loss in case of a chargeback.
-Check whether or not your transaction qualifies for protection by using services such as Visa’s Authorize.net and MasterCard’s CyberSource, which provides merchants with an additional layer of protection against fraudulent transactions.
-Keep detailed records of all purchases that could be used to fight fraudulent chargebacks.
-Have a clear return policy that is clearly displayed on the website and understand how to process returns quickly in order to protect your business from loss of revenue due to fraudulent transactions after delivery.
-Train employees on risk mitigation procedures, such as blocking suspicious IP addresses or asking for more details if they are unsure about any orders.
-Put security measures in place, such as a firewall or encrypted servers to protect sensitive information.
-Learn how to spot common signs of fraudulent behavior, such as high return rates and multiple product returns at a time. -Be proactive about reporting any suspicious activity on your site so that everyone can stay safe when shopping online.
Wrapping up
In our everyday lives, we encounter many different types of fraud in various forms. Some are well-known and heavily discussed while others fly under the radar, making it difficult for merchants and customers to be aware of these threats.
However, eCommerce fraud can have a significant impact on your business’s success and reputation if you do not have the necessary procedures in place to minimize risk.
Moreover, as a customer, you should be aware of these common types of eCommerce fraud in order to protect your personal information, which is increasingly valuable in today’s digital world.
Implementing security measures and becoming educated on the tactics that fraudsters use can help keep both customers and merchants safe while purchasing online.
