Ecommerce fraud takes many forms, every eCommerce business should protect themselves & their customers
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Card testing is a type of fraudulent activity where someone tries to determine if stolen card information can be used to make purchases.
Fraudsters will try making small purchases, to test multiple stolen credit card numbers, to test if the credit card can be used for future bigger purchases
How to protect yourself?
Take advantage of fraud detection solutions, most serious payment solution providers, like Stripe, have them in place.
when someone purchases an item or service online and then requests a chargeback from the payment processor, claiming the transaction was invalid.
In a chargeback fraud, also called friendly fraud, the shopper purchased an item from your online shop and argued the item never was delivered.
Instead of calling the merchant, they call their credit card issuer, asking to cancel the transaction.
Other stories used are "We returned the item, but we didn't get a refund", or we cancelled the order and the merchant still have sent it".
How to prevent chargeback fraud?
verify if you work with a payment processor who offers AVS
An address verification service is a service provided by major credit card processors to enable merchants to authenticate ownership of a credit or debit card used by a customer. AVS is done as part of the merchant's request for authorization in a non-face-to-face credit card transaction.
Involves returning goods ineligible for the refund to a retailer in exchange for money or other goods.
The goods returning may be illegally bought, they can be damaged goods, other simulated goods in the original product packaging, or switching labels, or purchasing products at a lower price and then returning them for their original value.
How to prevent refund fraud?
When the criminal access the victim’s shoppers account, and use the saved credit cards details to buy the goods
Fraudsters are using various techniques to attempt an account takeover, from social engineering, Phishing, credential stuffing and bot attacks
How to prevent account takeover
Once an order is placed, using a stolen credit card, the goal is to intercept the package and take the goods for themselves
With interception fraud, fraudsters attempt to intercept a customer’s order and obtain goods for resale.
Fraudsters will contact a vendor’s customer service partner to have the order’s shipping address changed to their own.
They may also approach the shipping company directly and ask them to reroute a delivery to an alternative address.
How to prevent Interception Fraud?
When a shopper makes a purchase on a third-party marketplace but the product they receive was fraudulently purchased with a stolen credit card
This practice harms businesses of all kinds. Customers usually aren’t aware as the customers will receive their products.
In this fraud involves 3 actors:
How to prevent triangulation fraud?
Keep an eye out for customers who are placing frequent, repeat orders for the same few products, especially if they’re using different shipping addresses for each order.
I hope you enjoyed, learned and be ready to stop fraud on your eCommerce website
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