Online business fraud is a booming industry for criminals. But far from a victimless crime, it affects your business and your customers’ lives, and the effects of fraud can be devastating to the point of bankruptcy. From friendly fraud to account takeover, here are some of the worst.
Bot Card Testing
Fraudsters can test credit card details and limits by making small purchases on your site. This is a very common type of fraud, and it accounts for almost 20% of online fraud and is used commonly with MOTO payments. Often, the purchases start very small, and they increase the more a criminal gets away with it. This is a particularly dastardly fraud because, by the time you or a customer realizes what has happened, large purchases may have already been made.
So-Called Friendly Fraud
This is a strange one but is so-called because, in many cases, the customer complaining to dispute a charge is right. This can result in a chargeback, which they are legally entitled to if they have been charged for something they didn’t buy. Yet the fraud part of this occurs when a customer buys something from you and then claims they didn’t receive it. Another strategy is requesting a chargeback and claiming that they have returned the item back to you.
Online Business Fraud Includes Refunds
Fraudsters can use stolen credit card details in many ways, and one of the worst is refund fraud. This is because you, the credit card company, and the victim are wronged. This happens when a criminal makes a purchase with stolen card details online. They then contact your eCommerce site and request a refund for overpayment of goods. However, they also request that the money be returned via another means because their credit card has been closed, leaving you liable.
Account Access and Takeover
Account access and takeover is one of the scariest types of fraud there is. Often, these fraudsters knowingly and willingly target vulnerable people, such as the elderly and the mentally impaired. They often pretend to be from their bank, inform them of fraudulent activity, and request their bank details to check. They can also use duplicate websites and apps to trick the victim into logging in using their genuine credentials, whereby they can then access everything.
Product Interception
This is a cheeky type of fraud and is very simple in nature. A criminal makes a purchase on your eCommerce site using someone else’s credit card details. These are either stolen or bought on the dark web. They aim to intercept the goods before they arrive at the address associated with the credit card details. Some things to look out for include last-minute changes to the shipping address and product rerouting via the courier’s services. Some will even sign for the goods.
Summary
Bot card testing is a common online business fraud these days. You should also watch for refund fraud that leaves you liable for repayment to a victim. And watch out for last-minute changes to product shipping addresses to identify and target product interception fraud.
