Different Types Of Online/Ecommerce Frauds You Should Know About

Your online store is vulnerable to different types of cybersecurity breaches. Ecommerce fraud occurs on an ecommerce platform and caused by using fake credit cards, false identity or false legitimate institution. These types of fraud negatively affect the ecommerce.

Ecommerce fraud is so prevalent because prosecutions are rare, due to time and resource constraints. To eliminate frauds on your eCommerce platform and to reduce the impact on revenue, you need a high-quality fraud detection and prevention management system.

With the passing year fraudsters are leverage advanced tactics so frauds are sophisticated and ever-evolving. If a fraudsters need to be right at once to stole info or impact your ecommerce then you need to be right at every single second to prevent the effect.

Let’s look at the fraud schemes you need to be aware of to combat them on your online store:

  1. Credit card fraud
    One of the kind of threats where attacker stole credit cards details. They may get electronic access to the card details or may have physical possession. The card owner can ask for the reimbursement of the payment from the company so company need to verify the authentication of the customer. 
  2. Refund Fraud
    These kind of fraud are encountered when an attacker with the stolen credit card details ask for the reimbursement of the overpayment to the alternative payment method. This makes non-payment of the original credit payment and company have to pay whole amount to the customer. 
  3. Merchant Fraud 
    Often encountered in the online marketplace where merchant is responsible for both seller and associated buyer and have to make reimbursement. Attacker may involve in selling of non-existing product and getting payment for the same. 
  4. Card testing fraud
    This type of fraud are done using websites which generate different response for every declined card payments. Attackers use bots for testing and different preposition to get the right and complete card details. 
    Let say if the card details are declined because of wrong expiry date then they check different responses to test and validate card number to get the right expiry date. 
  5. Friendly fraud 
    These types of fraud usually committed by the aware customer who knows exactly what they are doing. They will ask for the refund/reimbursement of the payment after product been delivered claiming their card was stolen. These type of frauds are hard to detect and usually known as chargeback fraud. 
  6. Identity Theft 
    Most common type of fraud. Fraudster uses someone else identity and card details to make online purchase. These type of fraud are becoming usual due to increasing data breaches. 
  7. Phishing 
    It is a cybercrime in which a target or targets are contacted by email, telephone or text message by someone posing as a legitimate/credit institution to lure individuals into providing sensitive data such as banking and credit card details, and passwords.
  8. Interception fraud 
    This type of frauds occur where the fraudsters causes interception by creating orders where billing and shipping address matched to linked card details.
    In this case Fraudster usually lives to the near proximity of cardholder and physically waits near the address given to receive the delivery on the behave of actual address owner.
  9. Account takeover fraud 
    This occurs when attackers get access to the customer’s account  username and password and use it to make purchases from the online store. The fraudster will changes the shipping address minutes before making the purchase. 
  10. Triangulation fraud 
    As clear from the name it involves three parties: Online store, Fraudster and unsuspected shopper. Fraudster created a store to sell high demand products at low prices and collects payment as well as the customers data. Fraudster then uses this stolen customers card details to purchase goods from a legitimate website and ships them to the customers that purchased on his new online storefront.

This type of fraud can be identified by the products storefront where the stolen goods were purchased.

Need some help figuring out some effective fraud prevention strategies? Contact us.

Posted by: Incaendo
frauds, threats, eCommerce frauds, protect online