As E-commerce continues to grow, fraud and cybercrimes also rise in the online sector. With the increase in online merchants and buyers, fraudsters employ new and different techniques to commit financial and information theft.
It has become easy for a fraudster to cover their tracks and hide behind different false or even stolen details. Avenues like the dark web facilitate fraudsters’ access to a ton of personal information used in fraud.
We highlight four types of fraud that are causing losses to eCommerce merchants.
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Triangulation Fraud
This trickery occurs when fraudsters impersonate an existing merchant website and offer unsuspecting clients cheap goods or huge discounts. Unfortunately, the goods never appear, leaving the customer in shock. Mostly these fraudsters set up ads on other websites or email users directly via a phishing trial.
The existing, legitimate website suffers reputation damage since customers believe the original site ripped them off. In addition, the unsuspecting customers lose money and risk their credit card information being used in other fraud schemes.
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Affiliate Fraud
Affiliate fraud involves malicious individuals manipulating sign-ups and traffic of a merchant’s website to confuse the merchant they are receiving more traffic than they do. This con is done by simply sending spam emails and refreshing a webpage several times to create the perception of high traffic.
Many companies are now involved in affiliate marketing programs and pay commissions via sharing content and links. Therefore, faking activity on a website may allow fraudsters to profit from commissions.
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Identity Theft Or Payment Fraud
Among the most common fraud techniques involves a fraudster stealing personal information to impersonate the victim. The criminals may not only use your card information but may opt to steal your names, addresses, user accounts, email accounts, or even personal devices. This information and access allow the fraudster to appear as the victim, leading to fraudulent purchases.
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Friendly Fraud
It involves either a customer or fraudster paying for products and later claiming they were damaged and never delivered. This approach will prompt the merchant to issue redelivery of the item or give a refund failure to which the merchant may receive a chargeback. Chargeback involves funds being retrieved from the merchant’s bank and given back to the customer. It’s worth noting this sort of fraud may also occur by mistake.
Final Thoughts
With the eCommerce expansion, businesses and merchants must employ fraud detection technologies or invest in fraud teams to cope with the ever-rising risk of falling for fraudsters. Those who are not tech-savvy can opt for the best merchant account for eCommerce that has fully integrated fraud prevention in their systems.
Author Bio
Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of the best merchant account for eCommerce. He also writes non-fiction on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.