E-commerce fraud has increased with the rise in online commerce, as accelerated by COVID 19. It is probably estimated that by the time when 2024 comes, e-commerce merchants might lose around $24 billion to online payment fraud. While these fraud mechanisms keep on increasing and have become quite common, some bad actors are further launching new sophisticated fraud attacks.
So, the time has actually come when you have to take some proactive steps for detecting and then preventing e-commerce fraud over here. Investing in the proper e-commerce fraud prevention solutions will always end up making a big difference in financial results and also when it comes to customer safety. So, understanding the e-commerce fraud beforehand is always a good call to address. There are some signs that you need to follow for that.
Checking on the payment fraud:
The eCommerce fraud prevention company is here to focus on payment fraud and to keep these issues at bay. Such frauds will take place when your credit cards get stolen for purchasing profit and goods by reselling the items. CNP or card-not-present transactions are always at risk for this kind of fraud as a bad actor does not need to present a card at the point of purchase.
Businesses that won’t actively prevent the payment fraud risks might end up losing money to false promises, operational inefficiencies, and chargebacks.
Now for the friendly fraud:
Such kinds of friendly frauds will take place whenever the consumer ends up making an online purchase and then will dispute the charge with their bank.
- Such disputes will mostly end up taking the shape of chargebacks for the said merchants.
- Then in some instances, the consumers might have some bad intent to dispute payments and then keep the services or the goods.
- But most of the time, consumers might call their credit card firms or the banks to dispute the charges that they do not recognize.
- Most of the time, friendly fraud is not attributed to criminal enterprises. However, it can even damage profits and affect the inventory to a great extent.
But, merchants and businesses can always prevent such friendly frauds. Avoid the chargebacks and resolve disputes with some of the best chargeback prevention solutions from e-commerce fraud management companies.
ATO fraud or account takeover:
Account takeover fraud will take place when a bot, human, or botnet users end up stealing credentials for accessing the accounts of multiple customers. Once the access has been made, it is time for bad actors to drain loyalty points or monetary funds. They might also end up purchasing services or goods or even steal the customer data.
- Apart from losing out on revenue, ATO fraud will damage your brand reputation.
- It can permanently erode the trust that the brands have with their long-lasting potential customers.
- Such form of non-financial credential fraud takes place because of the dark web demand for stolen passwords, email addresses, and some other private personal information.
- Whenever the bad actor ends up discovering the right username and password, they will start to access and exploit the genuine customer-based accounts.
Focusing on the retail arbitrage fraud:
Retail arbitrage fraud will mainly take place when the malicious bots allow that single buyer to procure larger quantities of the discounted items for the resale value on various marketplaces.
- Such fraud will undercut the revenue and profits and will drain inventory.
- It will also end up stealing the discount-conscious customers away from the brands.
- Retail arbitrage fraud will end up in some major price differences across marketplaces and poor customer experiences, which will reflect quite poorly on the brands.
- Right now, bots are in the evolving phase, and the malicious bots are becoming quite harder to detect and block with that perimeter security, content delivery networks, and web application firewalls.
- The latest generation of bot detecting solutions has helped in identifying and then classifying some of the sophisticated bots with ease.
- These preventive solutions will block the activity of malicious bots and will allow for the good bot activity to take over. It will verify some of the questionable bot activity with some step-up authentication.
Here, the bad actors will try to intercept the order of a customer and procure goods for resale. For that, the bad actor will come in touch with a customer service partner of the vendor and have the shipping address changed. They will further approach the shipping company to reroute the delivery to an alternative address.
Once you are sure of the different types of e-commerce frauds taking place, you can focus on the solutions from the preventive e-commerce companies as well. Make sure to give them a call right away and procure their services ASAP.