Ecommerce Fraud

In today’s era, most of all are involved in eCommerce activity which involves the number of transactions in buying and selling of goods and defining products. Many companies are using e-commerce worldwide to update the product and increase their sales. Ecommerce Fraud is an illegal transaction performed on an eCommerce platform by criminals and fraudsters by using stolen payment information for online transactions. 

Fraud can occur through words or actions- it includes false and misleading allegations withholding of relevant information which leads to fraud. 

Ecommerce fraud is an illegal or false transaction made in a webshop. The big difference between physical payment and online payment is that a card needs not to be present while making online transactions. The fraudster simply needs the card information. Hackers can steal this information as it is and they happen to conduct unethical transactions and fraud activity. 

Fraud has never been a new thing, although the trend for E-commerce fraud rises as the number of cash-free transactions increases. It is especially obvious now when the world is moving away from in-store purchases. Due to the COVID-19 quarantine, people have to make more purchases online to stay safe or because the products they need are unavailable in closed local shops. 

E-commerce Fraud Protection As the trend for E-commerce fraud rises and E-commerce fraud scenarios and malware become more subtle and harder to detect, E-commerce fraud protection has never been so important. To make sure that their business is protected, every merchant and bank should pay attention to the latest trends in fraud detection such as modern E-commerce fraud software on Artificial Intelligence (AI), learn the best fraud prevention practices, and be aware of common types of online fraud. 

There are following types of ecommerce fraud that we should be aware of

Credit card fraud.

Credit card fraud is the umbrella term for fraud that is committed using a credit card or debit card. In the context of eCommerce fraud, credit card fraud is also known as card-not-present fraud and payment fraud. In credit card fraud conducted online, the fraudster uses stolen credit card information to purchase products or services from a web merchant. In a typical scenario, a criminal visits a site on the dark web that sells stolen credit cards.

The criminal buys the card data and visits an online store, using that stolen card number to buy a product or service. This initial transaction defrauds the cardholder whose card was stolen. But eventually, it defrauds the store owner, who must refund the purchase (and sometimes pay a chargeback fee to the bank that issued the card).

Merchants can also become victims to card testing scams, where multiple credit cards are attempted to test which are still active and will allow for purchases. These types of purchases are usually small, low-risk orders, but can add up to a big hit on a merchant’s bottom line.

Affiliate fraud

Affiliate fraud is an illegal activity intended to generate affiliate commissions. In affiliate marketing, online merchants pay affiliates a commission for sales that affiliates refer to In affiliate fraud, criminals game the system and defraud the online merchant using fake activity to either generate commissions or to increase the amount of the commissions.    Prevention from all this fraud is important. There are a few steps and precautions that can detect that it is fake and fraud, if you see the fake amount, with false calculation and credit card details verification, is important. Use eCommerce fraud protection services, Use verification technology to double check the information. Take advantage of email authentication. Identify the origin of transactions. Ensure that the software which you are using is updated and safe. Check proper support and advisory for the system.