4 Main Forms of Fraud All eCommerce Brands Must Look Out For

4 Main Forms of Fraud All eCommerce Brands Must Look Out For

Faith Ocampo Published on February 28, 2017Last updated on December 21, 2021

Online retailers are losing a huge chunk of their earnings to fraudsters. How can you protect your brand from this threat?

The Internet provided companies a better way to market and sell their products. By putting up online shopping platforms, they can reach more customers and provide them with a hassle-free way to shop. Combine this with 24/7 availability and door-to-door delivery and you have the makings of a successful brand.

Ecommerceโ€”the umbrella term covering all web-based commercial transactionsโ€”thus presents entrepreneurs with a lot of opportunities. But it also comes with risks, many of which are unique to digital brands.

One of the biggest threats is online fraud. In 2014, fraudulent schemes by cybercriminals robbed businesses of $16.31 billion worth of revenues. This means companies lost 5.7 cents for every $100 they earn.

This new breed of crime is difficult to ward off, as they take on many forms. Here are the four main types of fraud you must be aware of.

  1. Identity Theft

    ecommerce fraud cybersecurity data security breach hacker
    This one is perhaps one of the most common form of online scams. Identity theft is the illegal acquisition of a person’s private information: name, birth date, address, credit card details, and others. Criminals then disguise themselves under this new identity to conduct illicit transactions. For instance, they can order items using a false name or use someone else’s credit card details to pay.

    Fraudsters steal a new identity in various ways:

    • Pharming
      Criminals redirect Internet users to a fake website that’s been designed to look like a legitimate one. This allows them to siphon customers’ account details, such as usernames, passwords, and account numbers. After stealing these bits of data, fraudsters will then be able to take over an existing account and use it for online shopping.

    • 4 Main forms of fraud all ecommerce brands must look out for | Open Access BPO
    • Phishing
      Here, attackers pretend to be a reputable person or organization in order to trick other people into revealing their private data.

      Using email, instant messaging, and other channels, phishers may send messages that contain links or attachments. When clicked on, these would install malware on the recipient’s device, allowing criminals to collect personal information about the user.

      Common types of phishing include vishing, which utilizes voice calls to commit fraud; smishing, which is done through SMS or text messages; and pharming, wherein users are redirected to a spoofed website of a legitimate business.

    • Man-in-the-Middle Attacks
      Also called MITM, this one is generally more sophisticated than the two discussed above. Under this method, attackers place themselves between customers and businesses (or customers and financial firms) to copy credit card or login data. At times, they may also alter the messages or information exchanged during the transaction.

  2. Chargebacks

    ecommerce fraud depiction online shopping miniature delivery box on laptop

    This type of ecommerce fraud can be difficult to spot because these are carried out by customers themselves. They start by ordering items and paying for them using their debit or credit cards. In fact, they make it a point to follow all your policies so you won’t even get a clue that they’re up to something suspicious.

    The real crime happens right after you’ve shipped their orders. Customers may call you back to claim that their credit card details were stolen and then ask for a chargeback. Being an accommodating brand, you may agree to give them back their money. Thus, in the end, they get to keep your products without paying for them.

  3. Clean Fraud

    ecommerce fraud cybercriminal committing data security theft

    When skilled cybercriminals commit a clean fraud, it’s almost impossible to detect, as they often leave no traces of any illicit activity. To do this, they closely study the fraud protection measures being adopted by an online shopping website. This familiarity lets them go around or find loopholes in a store’s web security features.

    The truth, however, is that they also use another person’s credit card details to make purchases. To make sure they won’t get caught, they first collect a lot of details about the card’s owner. They may even verify that the credit card works by buying cheap items online so they can confidently make big-time purchases later.

  4. Triangulation Fraud

    ecommerce fraud cybercrinical hand coming out of laptop screen stealing credit card
    Triangulation fraud, which combines several identity theft techniques, has three phases. First, a fake ecommerce website is created, luring buyers by offering high-quality goods for extremely low prices. Typically, however, there’s a caveat: customers can only pay with their credit cards to acquire the item or gain more perks such as free shipping. The bogus website would then collect information about the customer.

    Here’s where the second phase comes in. Once the customers’ names and credit card details have been stolen, they would be used by the fraudster to place a legitimate order on the shop’s real website. The items would then be shipped to the original customer. At this point, both the brand and the customer still don’t know they’ve become victims of an online scam.

    During the third phase, the attackers make additional purchases using the stolen card data. This series of illegal activities often go unnoticed for a long period, which results in bigger profit losses for brands.

Make data security a priority for your business to keep your customers safe. Contact Open Access BPO for secure call center services and back office solutions trusted by global brands.



Read More

Faith is a digital media enthusiast aiming to become an active part of the tech world by sharing her insights. She likes to blog about everything digimarketing, technology, and social media.
JOIN US ON FACEBOOK
Open Access BPO
Open Access BPO16 hours ago
Among other benefits, ๐—ฐ๐—ผ๐—ป๐˜๐—ฒ๐—ป๐˜ ๐—บ๐—ผ๐—ฑ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ถ๐—ผ๐—ป monitors and reviews user-generated content to:
โ€ข ensure the safety of customers;
โ€ข combat spam and potential scams;
โ€ข prevent misinformation and fake news;
โ€ข boost user experience; and
โ€ข cultivate an inclusive community.

๐—•๐˜‚๐˜ ๐˜„๐—ต๐—ถ๐—ฐ๐—ต ๐—ฐ๐—ผ๐—ป๐˜๐—ฒ๐—ป๐˜ ๐—บ๐—ผ๐—ฑ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—บ๐—ฒ๐˜๐—ต๐—ผ๐—ฑ ๐—ถ๐˜€ ๐—ฟ๐—ถ๐—ด๐—ต๐˜ ๐—ณ๐—ผ๐—ฟ ๐˜†๐—ผ๐˜‚๐—ฟ ๐—ฏ๐˜‚๐˜€๐—ถ๐—ป๐—ฒ๐˜€๐˜€?
Explore the fascinating types of #ContentModeration shaping the digital landscape: https://buff.ly/3WR5rn5

----------
Work with our content experts to build a community where everyone feels heard and protected: OpenAccessBPO.com/get-started

#WeSpeakYourLanguage
Open Access BPO
Open Access BPO2 days ago
Preventing your customers from leaving your brand may not be as easy as it sounds, but here are 5 tips your outsourced #CallCenter's customer retention team must consider: https://buff.ly/3Nem7Sb

----------
Ensure brand loyalty with Open Access BPO's high-quality #CustomerSupport. Contact us today: OpenAccessBPO.com/get-started

#WeSpeakYourLanguage
#CustomerRetention
Open Access BPO
Open Access BPO2 days ago
#CallCenter Team Leaders drive progress and ensure top-notch service for your brand's customers.

Want to unlock the secrets to becoming an extraordinary leader for your team?
Here are the 5 biggest enemies of great leadership, along with a few tips on how to be a good leader: https://buff.ly/45LagCr

----------
Partner with Open Access BPO. We have great call center agents and team leaders to guarantee your brand's growth: OpenAccessBPO.com/get-started

#WeSpeakYourLanguage
Open Access BPO
Open Access BPO5 days ago
To build a truly customer-centric organization, your #CustomerExperience team must be highly emotionally intelligent.

Here are the 5 advantages of cultivating #EmotionalIntelligence among your #CallCenter staff: https://buff.ly/43uHbcu

----------
Connect with an #outsourcing firm that can deeply connect with your customers: OpenAccessBPO.com/get-started

#WeSpeakYourLanguage
#CX #CustomerSupport
Open Access BPO
Open Access BPO6 days ago
Love knows no boundaries, and this month, we celebrate the beautiful #diversity that makes us who we are. ๐—ฃ๐—ฟ๐—ถ๐—ฑ๐—ฒ ๐— ๐—ผ๐—ป๐˜๐—ต honors and uplifts the LGBTQIA+ community, their achievements, and their ongoing fight for equality.

Open Access BPO joins the LGBTQIA+ community in celebrating authenticity, acceptance, and love this #PrideMonth.

Let's all spread love in all of its forms! Happy Pride!

#WeSpeakYourLanguage
#PrideMonth #Pride2023
#OASpeaksWithPride
#OneWithDiversity
Open Access BPO
Open Access BPO6 days ago
#FlashbackFriday: Revisit an enlightening blog post that delves into the historic Stonewall Riots, a pivotal moment in #LGBTQIA+ history.

Let's honor those who paved the way for progress, sparking a movement that continues to inspire change today: https://buff.ly/3C9zdd8

#WeSpeakYourLanguage
#PrideMonth #InclusivityMatters
#PrideMonth #Pride2023 #PrideHistory
#OASpeaksWithPride #OneWithDiversity
Open Access BPO