Ecommerce fraud and online shopping has never been so popular.
In an annual survey by comScore who polled 5000 consumers they report that 51% of shoppers now do their shopping online. This is compared to 48% in 2015 and 47% in 2014.
Now in 2017 e-commerce growth shows no signs of slowing down. With this growth comes an increased risk of fraudulent transactions.
Ecommerce fraud is here to stay.
Like it or not ecommerce fraud is a part of business, but there are ways to minimize that risk.
In this article we will look at the top 5 e-commerce threats to look out for in 2017 and what to do about them.
Identity Theft & Friendly Fraud
The main threat will remain identity theft. Fraudsters will seek your personal information. Their main goal is to use a different identity and, for example, place an online order.
Identity theft also includes a concept known as man-in-the-middle attacks where credit-card data is intercepted and copied as it is transferred online.
Friendly ecommerce fraud happens when a customer makes a credit card purchase then issues a chargeback after receiving the goods or services. they do this with the aim of getting the good for free.
In some cases the customer just wants to hide the purchase from their partner or spouse. This happens in the adult industry!
Sometimes ‘friendly fraud’ happens when a customer genuinely forgets about the purchase. They see the transaction when the card statement comes in and they freak out. this type of forgetful fraud is usually easy to deal with.
Merchant and Triangulation Fraud
According to Ralph Tkatchuk at networkworld.com a freelance data security consultant and expert with over 9 years of field experience.
In merchant fraud, the goods are provided at extremely low prices yet no shipment takes place.
There is also a wholesale version of this fraud. No specific method enjoys any exclusivity, yet it is common knowledge that no-chargeback payment methods come to life in this practice of fraud. This also involves a majority of the push payment types.
Considered as one of the more complex ecommerce attack methods, triangulation fraud involves quite a bit of collaboration, as three points are involved.
Role #1 belongs to an ordinary customer placing an order through a type of credit, debit or PayPal tender.
Role #2 involves a fraudulent seller receiving the placed order, then requesting the actual product from a legitimate e commerce website while using a stolen credit card.
Role #3 is the part played by a legitimate e commerce website completing the order requested, completely unaware of the criminal nature.
Affiliate & Clean Fraud
Affiliate fraud is also getting more popular nowadays. The aim is to trick merchants into thinking a sale has been made in order to collect a commission.
They do this in a variety of ways including manipulating sign up data or traffic to a site. This often involves people creating fake accounts to manipulate the data.
Clean fraud involves the use of stolen credit cards to make purchases.
Ralph goes on to say;
Clean fraud also involves the use of a stolen credit to make an order. In such a method, criminals resort to complicated practices, such as using sound analyses equipped in fraud detection systems, and obtaining in-depth data on the owners of stolen credit cards.
This information is needed to deceive the payment process and bypass the fraud detection solution.
The Counter Attack
Online piracy and the sale of counterfeit goods will face new challenges, as the U.S. Department of Justice has declared a new initiative teaming up state and local law enforcement agencies in this struggle. Washington has already pumped $3.2 million into this campaign.
New state-of-the-art advances are also making life more difficult for fraudsters, especially with the introduction of EMV chip card technology. This is a significant leap forward in enhancing credit card security, providing a strong incentive for small and large companies to jump on the bandwagon.
Fraud prevention and chargeback guarantee for ecommerce merchants, Riskified works on establishing genuine financial security between online customers and ecommerce merchants. This company delivers ecommerce fraud prevention solutions for merchants to certify previously avoided transactions.
At a time when the relationship between a buyer and a seller is in search of trust more than ever before, customer experience and the bottom line is protected through the services provided by this firm in pioneering the charge-back guarantee.
As calls for digital goods increase, we are witnessing a rise in the necessity of protection against fraud.
The e-commerce landscape is constantly changing and the fraudsters are usually just one step behind.
It’s vital for e-commerce store owners to use all the tools available to help fight this battle.
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